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India is one of the emerging developing economies demonstrating a healthy quarterly growth rate of over 8 per cent per annum in the recent past. Among the three sectors, agriculture and allied activities hold the key to a sustained growth journey in the coming years. Against this backdrop, the main thrust of the Eleventh Five Year Plan (2007-12) is “Towards Faster and More Inclusive Growth”. The bottom line, however, has been aptly summed up by the Prime Minister that growth alone cannot be the sole goal of planning since global trends in food production and prices will exert escalating “pressure on both availability and prices of basic food items”.

The imminent position for agriculture in the faster and inclusive growth paradigm, against this backdrop, has three key elements: agricultural sector growth rate pegged ” around 4 per cent, farm product export growth at 10 per cent and, consequent to rapid urbanization, faster pace of change in the food consumption basket. A clear understanding of desirability and feasibility of the first two growth rates are important for their serious implications on the smallholder-driven commodity producing rural agriculture sector.

The test, however, lies in correctly identifying the sources of growth in the agricultural and allied production activities. The next step would be to design commensurate investment in production enhancing policy and physical planning. The inclusion concept, therefore, has ambitions for such ground realities associated with trust in the growth rate.

The 4 per cent growth rate in agriculture and allied sector activities is aptly disaggregated into demand and supply side interventions in the 11th Plan strategy. However, a simplistic view demonstrates that the production growth rate is determined by the growth rates in the crop area and the yield rates (productivity) in a fashion that biological and natural resources principles determine the boundaries.

When the crop production growth rate is given, its validity can be checked using area and yield information. In the event that an independent estimate of yield growth rate is not available, for given values of the crop area growth rate and the output growth rate, the yield growth rate attains determinable significance. Thus, the onus of attaining a 4 per cent growth rate in agriculture and allied production activity certainly falls on obtained or planned values of yield rates. .

The smallholder agriculture in the country has a comparative advantage centered on the farming community. This advantage is available to the state agencies as well as to all those associated with the agribusiness sector. The challenge, though, will rest with those who effectively translate smallholder-friendly knowhow into similar show-how. The state agencies certainly have a lead in this challenge posed by the approved 11^th Plan strategy.

The three primary issues with special reference to a state or region could be categorized as follows:

1.     Exploring the matrix of agriculture (crop husbandry), livestock and environment (including horticultural and non-timber forest produce);

2.     Changes in the rural economic environment and identification of various segments of farmers in a state/region who will be impacted.

The common thread has been that scientists are attempting to provide specific instances to reconnect science with farmers in the field on the one hand and agriculture department officials on the other. The criticality of budgetary flow of funds into the agriculture sector to specifically address knowledge deficiency in a sustainable manner has been underscored.

The primary production activities in the rural areas generally address a micro-level cost-risk-return trinity a la the three R’s of reform propounded by Nobel Laureate Amartya Sen (viz. reach, range and reason). The limitation of the area growth rate during the 11^th Plan period is real with the exponential growth in the number of special economic zones (SEZs) for enhancing industrial activities. In the event that agricultural land will go out of cultivation for setting up SEZs, we are left with the productivity question.

This is a key element identified as the supply side constraint in the XI Plan approach. Another related yet critical component is the technological interventions. That technology is non-linear and lends itself to price and income substitutions typically in the smallholder-dominated agriculture once again have attained importance. There is an urgent need to devise a mechanism to get the agricultural scientist to pro-actively consider a region-specific optimization framework within the cost-risk-return trinity constraints of a specific region.

The quality and quantum of land and water are the dominant concerns for all the states. With the deepening of water table, the quality of water is bound to influence crop sequencing and output. Therefore, the diversification agenda for micro-level planning must factor the health of the soil and water quality into the main investment plan.

The great disconnect between the scientific fraternity and the farmers in the field will be addressed through extension activities, though agricultural extension has a meagre 4.7 per cent share in the total Central annual plan outlay for 2006-07. Besides, the proposition of attaining a 10 per growth rate in agro-product exports will raise the critical questions on quality and globally valid certification systems. The compliance cost burden in the smallholder farmer dominated system must be borne by public agencies to provide the required cost advantage.

Finally, environmental and net returns trade-offs need to be examined within the diversification discourse. Surely, it needs to be appreciated that the market price is not the sole or best objective “marker” for diversification. The key issue must be to incorporate corrections to environmental aberration in the crop area through policy instruments, particularly in agriculture. Clarity in such areas will greatly aid our efforts at reaching the 4 per cent growth target.

Mumbai Additional Sessions Judge D.O. Salvi has sentenced 11 people to life imprisonment for raping Bilkis Bano and killing 14 of her family members six years ago.

This was one of the most gruesome incidents of communal violence in Gujarat. The nature, extent and gravity of the crime were such that the accused deserved no leniency. A minor punishment would not have served the ends of justice. The judge had his own reasons in rejecting the prosecution’s plea for death sentence - the maximum punishment prescribed for the offence under the law.

However, life imprisonment is no small punishment and it is sure to act as a deterrent. The punishment would not have happened if the Supreme Court had not come to the rescue of Bilkis Bano by transferring the case from Gujarat to Maharashtra. The National Human Rights Commission, the media, NGOs and lawyers have all helped Bilkis Bano in her fight for justice.

Bilkis Bano told the media in Delhi that after raping her and killing her family members, some police officers and doctors tried to destroy evidence. It was the AIIMS forensic doctors’ report confirming that the bones recovered from the site belonged to her slain relatives that led to the conviction of the 11 accused. In all fairness, all those involved in the crime, including police officers and doctors, must be punished.

Given its questionable role, it is doubtful whether the Gujarat government would appeal against the acquittal of the seven accused. But then, nothing stops the CBI from seeking a review of their acquittal.

Judge Salvi has set seven persons free for lack of evidence. Nonetheless, the prosecution — if it goes in for an appeal — can make the best use of Bilkis Bano’s eyewitness account and build up a strong case for their conviction.

Bilkis Bano is afraid of returning to Gujarat where she faces a threat to her life. As she carne forward to give her testimony against heavy odds and helped the court in nailing down the guilty, the authorities concerned have a duty to provide all possible security to her and her family.

Special Economic Zones (SEZs) were conceived as delimited areas with high quality infrastructure and efficient administrative governance. However, the spotlight has thus far been on the cost of the various tax benefits and the implications of land acquisition. While important and emotive, focusing solely on them neglects the credibility of the promised offsetting benefits.

Before notifying an SEZ, the Central Board of Approvals, i.e. the Commerce Secretary, 16 other officers of the central government and a nominee of the state government, scrutinizes the application. According to these applications, SEZs are expected to generate 2.1 million direct and 2.9 million indirect jobs. These have been widely quoted by the Commerce Ministry in support of SEZs. Are these commitments credible?

At the outset, while data on name, location, area and type is available for all SEZs, availability of other data mandated in the SEZ application, varies widely. The most data available is for direct and indirect jobs and investment by developers, and even this is given only for 110, 82 and 109 out of 154 SEZs respectively; and just 15 SEZs provide data on foreign direct investment. This itself makes the approval process appear cavalier, with little real scrutiny.

Second, most SEZs and jobs are in the Information Technology/ Information Technology-Enabled Services (ITES) sector. Of the 2.1 million direct jobs, 61 per cent in this sector and another 15 per cent is in existing export sectors like apparel, textiles, gems and jewellery, footwear and pharmaceuticals. Only 21 per cent is in multiproduct SEZs, the supposed Mecca of manufacturing. It thus appears that SEZs merely perpetuate benefits for the IT sector and do little to diversify our exports. Is all this support to already successful industries worth it?

The story of indirect jobs is quite incredible. The IT/ ITES sector has a share of 68 per cent and of these two million jobs, over half (1.1 million) are in just two SEZs. Quark City, a small IT/ITES SEZ near Chandigarh, occupying 14 hectares, promises to generate half a million indirect jobs. Sanghi, a 200-hectare IT/ITES SEZ, near Hyderabad, proposes to create 600,000 indirect jobs but only a thousand direct jobs. The ridiculousness of these claims can be judged by the fact that if Quark’s proposed employment intensity could be replicated, more than 700 million proposed jobs can be created in just the notified SEZs!

This mindlessness becomes more evident when one looks at similar projects like IT/ITES SEZs. Usually; they should have similar characteristics but in reality, key parameters like employment per hectare and unit of investment and the ratio of indirect to direct employees vary by multiples of ten across the proposed SEZs. It makes one wonder whether the august Board of Approvals really looks at what it is approving.

Neither does it care about monitoring. Even though the minister stated in Parliament: “We no more talk of exports to earn foreign exchange….We kept the focus on how we would generate employment,” the monitoring format devotes two pages to calculating ‘net foreign exchange’ earned. Employment merits just one line.

Nevertheless, if one assumes that the commitments are credible, how will SEZs change India? Well over half of the jobs are in Gujarat and Andhra Pradesh alone. If one adds other high-growth states Karnataka, Maharashtra and Tamil Nadu, this goes up to 85 per cent for direct jobs. Of the proposed investment by units, for which the information is available, Gujarat and Andhra Pradesh account for 92 per cent. It is thus difficult to argue that the SEZs’ benefits are truly additional and that they are spreading growth across India.

Indeed, the 154 notified SEZs are in only 53 districts. Almost all SEZs are in districts with a higher level of literacy and most are in relatively more industrial districts. Twenty, mostly urban, districts account for 71 per cent of SEZs by number, 82 per cent by area, 88 per cent by number of direct and indirect jobs. These districts include all the major cities - Delhi, Hyderabad, Bangalore, Chennai, etc. - in addition to newer cities like Ahmadabad, Coimbatore, Indore, Mohali, Nagpur, Pune, Surat and Visakhapatnam.

In places like Goa, and around existing urban centers, it is possible for SEZs to succeed financially based just on housing and commercial development, even if they fail as processing areas. This, and the fact that many SEZs are ostensibly for IT/ITES, which are virtually indistinguishable from commercial real estate, and located close to existing urban areas lends credence to the fears that SEZs are actually real estate scams.

Even as the market seeks direction following its recent sell-off, some interesting trends are flashing on the screen. It may be premature to conclude much from the pattern of a few days but the initial signs may be telling us something. In the last few sessions, there is clear buying interest in sectors that were considered “unexciting” in 2007. It may be the first indication that 2008 may herald the return of the good old steady-state businesses.

The year 2007 was about dreams. Dreams are so much more exciting than going through the mundane routine of everyday life. Last year was thus a year of excitement till people got carried away and burnt their fingers. So, this year, investors appear a bit shy of ascribing crazy valuations to dreams and announcements and seem more intent on getting back on the straight and narrow.

Steady 20 per cent earnings growth, robust cash-flows, high return ratios, quarter after quarter of growth delivery- all things which seemed staid and boring last year, are suddenly back in vogue. So what if they appear somewhat less exciting than “exponential” growth projections four or six years down the line. Once again, a bird in hand is worth two in the bush. About time, too.

So we are now seeing steady buying in FMCG stocks, in select pharmaceutical names which are delivering good numbers, in some autos and even technology. In dated jargon we would have called this “defensive” buying, implying a return to steady cash-flow generators in unpredictable and uncertain markets. High beta sectors do well in momentum markets and the general perception now, for right or wrong, are that we will see less by way of momentum in 2008.

Now, momentum can certainly return to the market sooner than we expect, yet there is something fundamentally comforting about what is happening now.

There was something surreal about the way investors were ignoring companies which churned out hundreds of crores of profits every quarter, even as they fell in love with stocks with no current revenues and distant promises. The disconnect was just too wide and had to be bridged. The process may well have begun. So, as you tailor your portfolio for this year, do throw in some of the old blue chips. At best they will make you feel a bit bad if the markets rediscover their crazy bullish mood of 2007 but you will feel much better on the rainy days when 70 per cent of your portfolio won’t get knocked off in a week. Financial markets are not always about generating supernormal profits, sometimes they are about preserving capital too. Just like the middle overs of a one-day cricket match.

It was heartening to read the Prime Minister’s address to the National Development Council in December last year, where he argues that the main concern of the 11^th Plan, in its aim to achieve 9 per cent growth rate is equity; and it is the purpose of building that equity which can brand the 11^th Plan as being inclusive.

He said: “Equity is the foundation on which our democratic polity has to rest and thrive. It is the basis on which our citizens develop a sense of ownership of the state and its organs. Inequity can lead to large scale migration, disaffection and discord”. 

He acknowledges what the public has been pointing out across political and social spectrums, that in this last phase of rapid economic growth, there has been an intensification of regional disparities, urban-rural disparities, though he skirts the frontal issue of intra people disparities.

The prescription is more investment in education and health and industrialization of rural areas, while bemoaning the slowing of growth in agriculture and calling attention to the challenge and the threat of food insecurity - put more boldly, of hunger and deprivation. 

The concern on increasing disparities has been expressed somewhat differently by other groups - with a greater questioning also of the interpretation of the new buzz word or mantra ‘inclusion’, and inclusive growth.

The word is evocative and mesmerising perhaps because it is derived from a word that has been powerful, especially as articulated by dalits, of social “exclusion”. Inclusion as its opposite, thus has an evocation, emotive, political, powerful. However, what is almost totally left out of not merely the PM’s speech, but the entire exercise of the 11^th Plan are people.

Examining sectoral chapters - especially key chapters such as agriculture, labour and employment, industry and especially the foreign exchange earning special industries such as export oriented industries and services and SEZ, apart from a break up of the sector called industry - it is found that women are some of the predominant contributors to this growth.

Women are 40 percent of agricultural workforce and the percentage is rising; The unorganised sector’s contribution to overall GDP is 56.7 per cent; 60 per cent of total savings comes from informal sector; 73 per cent of informal workers contributions come from home based work; 53 percent of all women workers are home based workers, women are more than 90 percent of workers in the informal economy; and 44 per cent of all women workers are involved in unpaid work.

In that value chain, women are the predominant ‘contributors’, often as unpaid family workers or self employed. Going to export oriented production of goods and services, women are predominant, if not the major value adders, whether it is BPO or SEZ. A study has found that savings, that the PM celebrates, largely comes from the SME.

In other words, it could somewhat imprecisely be argued that
India’s women are the growth agents on which our Prime Minister and his colleagues are building the Indian dream of a powerful economic actor - and the informal economy is the base.

Interestingly, a deeper analysis of Chinese growth has also similar shades of being somewhat heavily borne on women’s backs. Perhaps if Mao Tse Tung was alive, he would say women hold up half the sky: Truly, women hold up half the economic sky. Perhaps if we had today a woman leader of high visibility - somewhat lacking in today’s globescape, she would have added ‘yes’. But their feet are in dirt and deprivation, even exclusion - if exclusion can be described as not being recognised, not being given an opportunity to participate intellectually, apart from valued physically.

Inclusion can be more than rhetoric. It has to be participation through provisioning of the knowledge which a social or an economic category has. Inclusion can also be an engine of growth as those who are knowing will bring their knowledge to bear on design and that knowledge can add value, as was recently revealed by a committee set up by the Planning Commission of women economist.

But as the late Raj Krishna with his graphic imagery had deplored or lamented, those in  positions of decision making- and in those days he meant his colleagues on the cabinet as he used to be invited to cabinet meetings were “knowledge proof’. ‘Wo bathi nahi chalthi hai Saab ‘, he used to say with his characteristic laughter, using his hands to demonstrate a bulb that would not light up in the minds of those around the table. This neglect of who is adding value even for those who are obsessed with a particular kind of growth will be the Achilles Heel of this growth path.

It is also alarming that almost immediately after the NDC meeting, it is being staled that Naxalism has to be crushed with commandos. Another expert group set up by the Planning Commission on tribal areas and the analysis they made, clearly showed that the same point that the Prime Minister makes- disparate development, exclusion from development in tribal areas, in fact exploitation by the developers,  was responsible for driving youth in tribal areas into Naxalism.

Thus Raj Krisha’s knowledge proof comment does seem somewhat on target. The regional disparity issue has to be broken down into more sophisticated classifications. Inclusion has to be respectful in that the excluded have to  be  included in articulation not only what they want, but their analysis of what is exclusion, as  was pointed out by the committee of women economists.

 Economic contributions and the way those contributions are either encroached upon or neglected, not even known if not valued, needs to be brought out to the screen. Evening out inequality requires bread, water and salt for those on whom Indian growth is riding