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Rome 30-31 May 2008

Dr Amit Mitra Secretary General Federation of Indian Chambers of Commerce and Industry (FICCI). Rome 30-31 May 2008. INDIA - Strong Macro Economic Fundamentals. US $ 1 Trillion Economy. Average Growth Rate (%). INDIA - Strong Macro Economic Fundamentals. Improving Fiscal Situation.

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Rome 30-31 May 2008

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  1. Dr Amit Mitra Secretary General Federation of Indian Chambers of Commerce and Industry (FICCI) Rome 30-31 May 2008

  2. INDIA - Strong Macro Economic Fundamentals • US $ 1 Trillion Economy Average Growth Rate (%)

  3. INDIA - Strong Macro Economic Fundamentals • Improving Fiscal Situation Fiscal Deficit

  4. INDIA - Strong Macro Economic Fundamentals • FDI Inflows on the Rise [US$ Million] Foreign Direct Investment (FDI)

  5. INDIA - Strong Macro Economic Fundamentals • Rapidly Increasing Global Trade [US$ Billion]

  6. INDIA - Strong Macro Economic Fundamentals • World’s Fourth Largest Foreign Exchange Reserves • US$ 313 Billion as on April 25, 2008 Forex Reserves

  7. INDIA - Agriculture • Agriculture in India • Contributes 18.5% to the National GDP • Provides Employment to Nearly 50% Workforce or • 70% of Population • Second Largest Arable Land in the World. Highest • Arable Land to Land Size Ratio • Largest Irrigated Land Network • Favorable & Diverse Agro-climatic Conditions for a • variety of crops Milk Largest Producer 91 Mn T Cattle / buffaloes Largest in the world 283 million F & V #2 in the world 129 Mn T Fisheries Marine: 2.7 Mn T Inland : 3.1 Mn T Tea Largest Producer (0.85 Mn T) Food Grains #2 in the world (218 Mn T) Goat & Sheep 182 million Sugarcane # 2 in the world (245 Mn T)

  8. INDIA - Agriculture • Dominating Crops WHEAT RICE

  9. INDIA - Agric ulture • Food Grains Production (Million Tonnes) TOTAL FOODGRAIN RICE WHEAT COARSE CEREALS PULSES 2007-08 figures pertain to III Advanced Estimates

  10. INDIA - Agriculture • Commercial Crops Production (Million Tonnes) OILSEEDS COTTON JUTE & MESTA SUGARCANE 2007-08 figures pertain to III Advanced Estimates Cotton – Million bales of 170 kg each Jute & Mesta – Million bales of 180 kg each

  11. INDIA – Agriculture Machinery Sector Need for Mechanization Total = 68% (207 M) • Even though Agriculture still Supports the Majority of Indian Population, Yet • Non-farm activities in rural areas are witnessing a rise in entrepreneurship and employment. As a result, number of people involved in agriculture is declining over the years. • Crop Diversification • Migration • To Achieve Higher Productivity • Monsoon Dependent (less Time lag for Manual Operations) Total = 60% (238 M) Total = 52% (250 M) Food grain production (Mt) : 129 210 209 Acreage (M ha) : 125 123 122 Labor/ area : 1.6 1.9 2.0 Tractor Pop. (M) : 0.7 2.5 3.1 Source: NSSO, 2005

  12. INDIA – Agriculture Machinery Sector • Changing Focus on Agri-mechanization - Automation Percentage share of Power usage in Indian agricultural sector Total Power Consumption (kW/ha) Source: Indiaagristat.com, Zinnov Research, 2007, Vision 2020 India, John Derre

  13. INDIA – Agriculture Machinery Sector Comparison of Mechanization with Other Countries, 2003 Source: FAO Yearbook 2003

  14. INDIA – Agriculture Machinery Sector • Indian Farm Equipment Market is expected to grow at a CAGR of ~5% • Indian Agriculture Farm Equipment Market is now widely exposed to International Trade • Favourable Factors: • Monsoon • Government Declared Support Prices for Crops • Supportive Credit Policy of Banks

  15. INDIA – Agriculture Machinery Sector • Usage Trends of Major Farm Equipment

  16. INDIA – Agriculture Machinery Sector Tractors • Use of Tractors has witnessed an increase of more than 78% since 1994 • There are nearly 13500 tractors per million hectares at present in India

  17. Combines Migration - Rabi and Kharif Wheat- From Punjab & Haryana to MP and Maharashtra (till end of March) and then to Haryana and UP (till 10th April).Return back to Punjab (by 15 Apr)

  18. Combines Migration - Rabi and Kharif Rice & Soyabean-From Punjab & Haryana to MP and Maharashtra for Soyabean(till Oct 15) and then to Haryana and UP for Rice (till Oct end).Return back to Punjab (by 1st week of Nov)

  19. INDIA – Agriculture Machinery Sector Future Requirements of Farm Equipments • Equipment for Seed Bed Preparation • Roto Tillage • Strip Till Drill • Zero Till Drill • Sowing and Planting • Pneumatic Precision Planter • Sugarcane Sett Cutter Planter • Vegetable Transplanter • Potato Planter & Rice Transplanter • Plant Protection Equipments • Power Weeder • Plastic Mulching • Electro Static Spraying • Orchard Sprayer • Irrigation Equipments • Sprinkler Irrigation System • Drip Irrigation System • Surge Flow Irrigation • Harvesting & Threshing • Strip Harvestor cum Reaper Windrower • Mechanical Cotton Picker • Grain Combine Harvestor • High Capacity Multicrop Threshor

  20. INDIA – Agriculture Machinery Sector Agriculture Machinery Trade (Million US$) EXPORTS IMPORTS

  21. Policy Mandate • Requirement for Farm Mechanization • Farm Power Requirement by 2020: 2KW/Ha • Removal of Regional Disparities • Infrastructural & Institutional Framework • Adequate Engineering Infrastructure at Implementation Levels • Effective Training and Extension Service • Repair & Maintenance Facilities • Machinery Banks for Custom Hiring Services • Credit at Simpler Terms • Appropriate Farm Machines & Equipments • For Small and Marginal Land Holdings • Crop Specific & Quality Machines • For Hill Agriculture • Gender Specific

  22. Policy Initiatives by the Government of India to Promote Farm Mechanization • Training • Establishment of Four Farm Machinery and Technology Training Institute (FMTTI) • Demonstration • Large Scale Demonstration of Equipment at Farmers Field • Incentives for Purchase of Equipment • Subsidy Through MMA, NFSM, NHM and Similar Other Schemes Available to all Categories of Farmers • Incentives for establishment of Machinery Banks at Block Levels for Custom Hiring Services • Identification of Machines • Hill Agriculture • Gender frienfdly Tools and Equipments • Crop Specific Package of Machines

  23. Policy Initiatives by the Government of India to Promote Farm Mechanization • Manufacturing Sector • De-reservation of Manufacturing of Agricultural Machines from Small Scale Sector • Training on Manufacturing Technologies Introduced • Quality of Machines • Minimum Performance Standards for Tractors, Power Tillers & Combine Harvesters Framed • Standard Specifications for All Machines • Equipment Promotion Through Subsidy: Testing by FMTTI or BIS certification is mandatory • Credit • NABARD Refinance available & Financing Norms Simplified • Agro Processing Sector • Scheme on Post Harvest Technology • Technologies Developed by ICAR / CSIR Promoted

  24. Rome 30-31 May 2008

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