February 2007 : Newsletter of CUTS – Granite E-Newsletter
Farm Sector may be allocated 20% more
Budget 2007-08 is expected to see a 20% increase in allocation for the agriculture sector. The finance ministry is expected to allocate Rs.5, 770 crore in 2007-08, as against Rs.4, 800 crore for the current fiscal. It is also expected to announce a new scheme for Rainfed Area Development Programme- and allocate Rs.350 crore for it. In other indications of the proposed thrust on agriculture this year, the finance ministry is expected to raise the allocation for various agriculture related programmes. Around Rs.150 crore may be allocated for the National Horticulture Mission, while the allocation for micro irrigation is set to go up to Rs 1,100 crore compared with Rs 910 crore in 2006-07.
(Business Standard, February 22,2007)
Mandis Loss Farmers gain
Retailers like Reliance and corporate agri-buyers like ITC are buying bulk produce from the farmers directly. By buying in bulk directly on the farmers doorstep, and booking future harvests as well, they are taking business from the traditional mandis. This has caused a sharp drop in supplies to the traditional wholesale markets and is driving up prices there.
Those gaining from this are farmers, who are getting a better and assured price for their produce. Also gaining are urban consumers in towns like Noida, neighbouring Delhi, where Reliance Retail outlets offer goods substantially cheaper than traditional neighbouring stores. What is squeezed is the trade margin in the middle, as the big companies exploit supply chain efficiencies.
This trend has invited mixed reactions from the different stakeholders. For instance, as this segment grows, it seems poised to shake up traditional markets and buying habits, at a time when political parties have been concerned about what might happen to the traditional mom and pop stores. Politicians have also targeted futures trading at the new commodity exchanges that began operations a couple years ago, arguing that futures trading has been responsible for inflation in food product prices.
(Business Standard, February 21,2007)
SEZ row, slow progress may hit agriculture export zones
The development of agri export zones (AEZ)- posited in the beginning of the decade as an out-of-the-box idea by the Centre for faster development of agricultural exports in resource-rich but infrastructurally backward regions-may turn out to be a casualty of the SEZ row. There may, in fact, be no special incentives in Budget 2007 for AEZs, which appear to have become as touchy an issue as SEZs, but for an entirely different reason: Failure. Acknowledging that anti-SEZ developments may have an unexpected fallout, government sources said, AEZs are also likely to be a hands off area in the Budget.
By December 2006, it was reported that the fate of as many as 37 projects under eight AEZs with an investment outlay of around 500 crore may hang, thanks to lack of approval by the government, despite all formalities having been fulfilled by the parent body, Agriculture & Processed Foods Export Development Authority of India (APEDA).
(The Economic Times, February 5,2007)
FCI may offload bonds worth Rs 6,200 crore (ET)
Food Corporation of India (FCI), the countrys premier foodgrain procurement organisation, is likely to sell bonds worth Rs 6,200 crore. These bonds, guaranteed by the government, are part of the Rs 16,200 crore worth of special bonds that FCI has been allowed to sell over three years in tranches. Significantly, the January tranche of Rs 1,250 crore special bond sold by FCI fetched it only Rs 66 crore. In contrast, an earlier tranche, sold in November of Rs 1,250 crore was fully subscribed. A fully-subscribed bond issue would ultimately impact positively on the food subsidy bill for the government, which currently stands at Rs 24,200 crore. This is because the subsidy will be funded by market borrowings and will not result in a cash outgo for the government.
These bonds, guaranteed by the government, are part of the Rs 16,200 crore worth of special bonds that Food Corporation of India has been allowed to sell over three years in tranches.
(The Economic Times, February 22, 2007)
Branding to help Cardamom exports to Gulf
Branding of Indian cardamom with stress on quality will lead to greater acceptability in the Gulf countries according to a survey conducted by TCS. The company was engaged as a consultant by Spices Board to recommend measures to increase penetration of Indian cardamom in the Gulf market particularly Saudi Arabia. The draft report prepared by TCS says that there is a liking for Indian cardamom in the Gulf.
(The Economic Times, February 27,2007)
Govt likely to extend TUFS beyond March 2007
The government is likely to extend the Technology Upgradation Fund Scheme (TUFS) for textile sector beyond March 2007, textile secretary AK Singh said. The scheme launched in 1999 is aimed at boosting modernisation in the textile sector. It offers 5% interest subsidy on purchase of machines. The textile ministry sanctioned projects to the tune of Rs 15,032 crore in 2005-06. Stressing on the need to promote manufacturing of textile machinery, heavy industries and public enterprises secretary RC Panda said the fiscal incentives are required as the textile equipment industry has contributed a paltry amount to the capital good sector in the last 25 years.
(The Economic Times, February 26,2007)
35 textile and farm items to get origin tag
The government is about to give 35 regionally-known agri and textile products the exclusive right to carry the tag of their place-of-origin in a bid to transform them into globally acclaimed products like French Champagne, Mexican spirit Tequila or Vietnams salty fish sauce, Phu Quoc.
The products which are in line for geographical indication (GI) protection are Goan spirit fenni, Bikaner bujia, several varieties of mangoes, Ootys eucalyptus and Keralas poovan banana and pokkali rice, which grows in marshy lands. The original producers of these products could claim a premium as the supply would be limited. Unlike patents and copyrights, GI protection is granted to association(s) of producers of a particular product.
(The Economic Times, February 24, 2007)
Handicraft sourcing hubs on PPP model
Large retail chains promoted by corporate houses can look forward to steady flow of handicraft items for their outlets in the coming years, with the government giving its nod for setting up of sourcing hubs across the country. These hubs would be set up on the public-private partnership model and first six would take off next fiscal,Mr Rakesh Kumar, Executive Director of the Export Promotion Council for Handicrafts (EPCH) said.
(Business Line, February 20, 2007)
Handicraft exports up 14.57% in April-Jan
Handicraft exports from the country recorded a 14.57% increase in dollar terms in April-January 2007 to $2.91 billion compared with $2.54 billion in the same period in the previous year. In rupee terms, exports grew 18.13 % to Rs 13,269 crore (11,233 crore). In the fiscal 2005-06, exports grew 11.46% to Rs 14,527 crore (Rs 13,033 crore) .In dollars they grew 10.06% to 3.28 billion ($2.98).
More than 80% of the handicraft exports originate from the northern and central India. EPCH now plans to increase its focus on southern and eastern India over the next three years. The focus on southern India would help in achieving the Rs.25,000 crore annual handicraft export target by 2010-11.
(Business Line, February 22, 2007)
Please send us your comments on the E-Newsletter to citee@cuts.org
Contact Us
CUTS International
D-217, Bhaskar Marg, Bani Park
Jaipur, India
Ph: +91.141.2282821
Fax: +91.141.2282485
If you no longer want to receive the E-Newsletter, you can click Unsubscribe and send us a mail.