Union Budget 2008-09 - Comments on the agricultural sector

INDIAN UNION BUDGET (2008-09) (PART-01)

We start with our analysis of the Union Budget by doing the sectoral analysis of the most important sector in Indian context – Agriculture. Some may claim that agriculture has lost its importance over the years but the fact remains that more than 60% of the Indian population is still dependant on agriculture either directly or indirectly. With the focus on SELF RELIANCE & SUSTAINABILITY the Budget essentially considers the following problems & thereby increases allocations in the following-

Problems
Inefficient support systems
Low levels of technology & infrastructure
Marketing and warehousing bottlenecks
Low capital formation
Degradation of land and water resources

Increased Allocation For
Food storage and warehousing
Soil and water conservation
Agriculture research and education
Irrigation and flood control

The situation isn’t too promising as average yield per hectare in India (1.8 tonnes) is far lower than that of China (4.3 tonnes) and Japan (4.8 tonnes), surface water irrigation efficiency ranges b/w 25-40% in India; b/w 40-45% in Malaysia; and 50-60% in Japan. In the past three decades of Green Revolution, area under agriculture increased at 0.4% as compared to 3% increase in agricultural production. There have been stagnated yields and wide price fluctuations. There happens to be a strong relationship between per hectare yields of food grains and rural development.

ACTUAL PRODUCTION RELATIVE TO TARGETS (MISSING THE MARK)
CROP - AVERAGE (%)
Rice - 94.7
Wheat - 91.4
Coarse cereals - 94.6
Pulses - 87.7
Foodgrains - 93
Oilseeds - 85.3
Sugarcane - 98.7
Cotton - 93.7

The budget proposals relevant for the agricultural sector:
* National Commission on Agriculture has recommended market facilities for farmers within a radius of 5 km i.e. one market for every 80 sq km. Hence, density of markets/mandis needs to increase nearly five and half times
* Trading platforms like NCDEX, MCX needs further boost
* Cold storage units exist only in 9% of the regulated markets as of now

So, WHAT WOULD THE GOVERNMENT DO ABOUT THE ISSUES? Would it be only limited to policies, allocations, huge sums of money and no transparency??? Or is the condition going to improve. Would Indian agriculture really become SELF RELIANT & SUSTAINABLE??
These are some of the issues which need to be addressed, but at this point they don’t seem to be getting the attention they deserve. Probably one year from now (by the time of next budget) we might be in a situation to analyze these issues in greater depth and comment on-

“Whether promises would remain promises or this time the government would really make a difference.”

Alternately, double click on the picture to see the article

For Team FINAX
Ashutosh Taparia

New Members - 2008-09

As promised a few days back, the new senior executive members of the committee have been elected and they have assumed office. The committee is by no means complete yet as we await the other executive members who would be chosen from the batch of 2008-2010.

Please click on the image to see a larger view.

XLRI takes a big leap with huge offers

XLRI Jamshedpur’s final placements for the batch of 2008 drew to a close with 298 offers being made to 180 students. A total of 12 international offers were made at an average of $90,000, with the highest offer coming in at $100,000. Domestic offers scaled a high of Rs 28 lakh while the average domestic offer stood at Rs 14.75 lakh. First-time recruiters on campus included the likes of JM Financial, Barclays, Kotak, 8 Capital Hedge Fund, Centrum and Aptivaa among others. 8 Capital Hedge Fund recruited exclusively from XLRI. As expected, finance ruled the roost with around 31% of the offers made in this domain by global and domestic biggies like Lehman Brothers, Goldman Sachs, JP Morgan Chase, JM Financial, Edelweiss, HSBC, Citibank, Barclays, Deutsche Equities, Standard Chartered, 8 Capital Hedge Fund, ICICI Bank, Icra, Kotak and Centrum among others. “Some even chose to offer treasury roles at their offices in London, Toronto, and Bahrain,” said XLRI placement committee chairman Uday Damodaran.

Consulting roles too, were offered in plenty by names like McKinsey, Accenture, The Hay Group, Ernst & Young, KPMG, Mercer, PWC, Hewitt Associates, Deloitte and Aptivaa. Around 21% of the students accepted these offers which were spread across verticals like strategy, banking and financial services, human resources, risk management, among others. Global FMCG majors too lined up for placements with companies such as Procter and Gamble, Hindustan Unilever, Johnson and Johnson, Colgate Palmolive, Nestle, Cadbury, Asian Paints, Reckitt Benckiser, Marico, Glaxo Smithkline and ITC offering positions to 23% of the batch in sales, branding and marketing (with international locations). Notably, global sales and strategy were offered as lateral entry positions by such IT majors as Infosys and HCL Technologies. General management roles also proved popular with names like TAS, Al Ghanim, The Aditya Birla Group, The Hinduja Group, Essar and The Murugappa Group, offering both national and international roles. Approximately 14% of the batch snapped up offers in this arena. Another 11% were made lucrative offers by technology sector companies like Microsoft, HCL, Infosys, Cognizant and Wipro, who offered lateral roles for students with previous experience in handling information services.

Source: Placement Committee @ XLRI

Revival of the blog!!!

Finance Association @ XLRI (FINAX) started this blog a few years back to express the views of finance enthusiasts @ XLRI on the various financial events happening around the world. However, somewhere along the line, it got forgotten due to priorities elsewhere.

The new team for the year 2008-09 is about to take over. The names and pics would be posted soon. However, the revival of the blog has started.

The blog would serve as a platform to showcase the original works of the students of XLRI, their views on the happenings across the globe, update on events etc. These are just for a start, basically everything under the sun (or moon or sky) remotely related to the area of Finance would be eligible for a posting here.
Keep visiting the place :)

Saurabh Bagrodia
Secretary
FINAX

XLRI Finance Seminar 2008

XLRI Jamshedpur, in association with The Institute of Cost and Works Accountants of India organized the ‘XLRI Finance Seminar 08’. Conducted and arranged by FINAX, the Finance association @ XLRI, the seminar provided an insight to management students about different aspects of Risk Management, a topic of utmost relevance in the present day business scenario.
Various dignitaries came together on a common stage and enriched the discussions with their vast experience and vision. The dignitaries included Dr. A.K. Sarkar , Director (Finance) - Central Coalfields Limited, Mr. N. K. Mishra, Group Head (Mergers & Acquisitions), Tata Steel, Mr. Robin Roy, Associate Director- PriceWaterhouse Coopers, Mr. C.E.S.Azariah, CEO-FIMMDA, Mr. D Ravishankar, Ex-Director, Investment & Risk Management-CRISIL, Dr Venkatachalam, Ex Director-Bangalore Stock Exchange. Delegates from Tata Steel, ICWAI and local banks in Jamshedpur and students from ICWAI also attended the seminar.
“This seminar exposed the management students and other participants present, about the various specialized activities related to risk management,” said Dr. Gourav Vallabh, an eminent XLRI faculty from the finance area.
The inaugural address was given by the guest of honour Mr. Chandra Wadhwa, President ICWAI while Dr. A.K Sarkar, the chief guest for the seminar delivered the keynote address.

Dr. D Ravishankar, enlightened the gathering on the topic of Risk Management in Banking Industry. He explained the various types of risks faced in banking industry and then also spoke about Basel II and the risk management architecture and framework.
A session on Interest and Foreign Exchange Risks and was taken by Mr. C.E.S.Azariah. He explained the 10 year G-Sec yield movements and also went on to demonstrate the change in the behavior of banks with the change in interest rate trends.
A panel discussion on Mergers and acquisitions (M&A) was one of the key events of the seminar. The panelists included Mr N.K. Mishra, Dr Venkatachalam and Mr Venkataraman with Dr Gourav Vallabh acting as the moderator. The panelists discussed on how corporate restructuring strategies are an important aspect of the corporate finance world and can dictate the fortunes of the companies involved for years to come. As industry structure moves towards more consolidation it becomes imperative for upcoming managers in India to understand the process of due deliberation and its importance in working out a deal.
Mr. Robin Roy, Associate Director, PriceWaterhouse Coopers, in his session on ‘Enterprise Wide Risk Management’ discussed about enterprise risk systems and their relevance in today’s global economy.
The participation level and discussion with students and faculty alike at the seminar re-established the strength and expertise of XLRI in the area of finance. The seminar was sponsored by ICWAI and co-sponsored by Tata Steel, Larsen &Toubro Ltd., Taxmann Publications and Karvy Stock Broking Ltd.