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New Delhi (January 29 2016):  Dr Raghuram Rajan Governor of the Reserve Bank of India delivered NCAER’s 4th C. D. Deshmukh Memorial Lecture on January 29 2016 to an audience of distinguished economists civil servants industry analysts and economics students.  Dr Rajan’s speech is attached in its entirety. Dr Bimal Jalan Chairman of India’s Expenditure Management Commission and former President of NCAER’s Governing Body and former Governor of the Reserve Bank of India was the Guest of Honour at the Lecture.

NCAER instituted this Lecture series in 2013 in memory of one of India’s most eminent economists and a founding father of NCAER.  Established in 1956 NCAER is India’s oldest and largest independent non-profit economic policy research institute. NCAER’s work cuts across many sectors including growth macro and trade infrastructure labour and urban agriculture and rural development human development and consumers. The focus of NCAER’s work is on generating and analysing empirical evidence to support and inform policy choices. It is also one of a handful of think tanks globally that combine rigorous analysis and policy outreach with deep data collection capabilities especially for household surveys. NCAER is celebrating its 60th anniversary in 2016. More information on NCAER is available on www.ncaer.org.

Said Dr Shekhar Shah Director-General of NCAER “This is a very special evening for a number of reasons. First not only are we honouring the first Indian Governor of the Reserve Bank of India and one of NCAER’s founding fathers but we are privileged to have both Dr Raghuram Rajan and Dr Bimal Jalan with us.” 

He went to say “Second 2016 marks the 60th Anniversary of NCAER.  The founding fathers of NCAER including Sir C D Deshmukh made a promise in 1956 to the nation of serving both government and industry with economic and social data of the highest scientific quality with empirical research of the highest order and with solid evidence to drive policymaking in India. Today we launch our 60th year celebrations with a renewal of this promise.” 

Dr Shah concluded “It is totally appropriate that the Lecture will take place in the Nehru Memorial Library a stone’s throw from the very house in which Pandit Jawahar Lal Nehru spent his life as the first Prime Minister of India.  It was on Nehru’s request that Dr Deshmukh and others came together in 1956 to conceive and then implement the idea of an institution of national importance for applied economic research. And it was Nehru who laid the foundation stone of NCAER’s office building not too far from here.”

In a wide-ranging address Dr Rajan emphasized the supreme importance of maintaining macroeconomic stability.  He said “Macroeconomic stability will be the platform on which we will build the growth that will sustain our country for many years to come no matter what the world does… Let me … reiterate that we have absolutely no intent of departing from the inflation framework that has been agreed with the Government. We look forward to the Government amending the RBI Act to usher in the monetary policy committee further strengthening the framework.”

Talking about how best to clean up bank balance sheets he said “we believe enough capital is available. While the profitability of some banks may be impaired in the short run the system once cleaned will be able to support economic growth in a sustainable and profitable way. To be less proactive as our past and the history of banking across the world suggests will only see the problem get bigger and less manageable.”

Dr Rajan’s address also dealt with fostering completion financial inclusion consumer protection and literacy.

Dr Raghuram Rajan became the 23rd Governor of the Reserve Bank of India in September 2013. He was earlier the Chief Economic Advisor to the Government of India and the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Booth School of Business and Non-resident Senior Fellow at NCAER. He has been the Economic Counsellor and Director of Research at the International Monetary Fund (2003–2006). Dr Rajan chaired the Indian Government’s Committee on Financial Sector Reforms (2007–2008). He was the President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences.  Dr Rajan was the recipient in 2003 of the first Fischer Black Prize awarded by the American Finance Association for the best finance researcher under the age of 40. He received the Global Indian of the Year award from NASSCOM in 2011 the Infosys Prize for the Economics Sciences in 2012 the Center for Financial Studies-Deutsche Bank Prize for Financial Economics in 2013 Euromoney’s Central Banker of the Year Award 2014 and Central Banking’s Central Banker of the Year Award 2015.  Rajan’s work spans a range of areas in Financial Economics.  Dr Rajan has a BTech in Electrical Engineering from IIT Delhi an MBA from IIM Ahmedabad and a PhD from MIT.

Previous C. D. Deshmukh Memorial Lectures include the 2013 Inaugural Lecture by Professor Kaushik Basu Senior Vice President and Chief Economist of the World Bank and a Nonresident Senior Fellow at NCAER.  Basu spoke on “Grassroots Welfare Schemes and Macroeconomic Choices: India’s Dilemmas”. This was followed in 2014 by a lecture by Dr Arvind Panagariya now Vice Chairman of NITI Aayog  on “A Reform Agenda for India’s new Government.”  The 2015 Lecture was by Mr David M. Malone UN Under-Secretary-General and the Rector of the United Nations University on “From Millennium Development Goals to Sustainable Development.” These Lectures are available on www.ncaer.org

“Timely” weather forecast services to 11.5 million peasants resulted in economic profit worth Rs 42000 crore during 2015 Minister for Science and Technology and Earth Sciences Harsh Vardhan said today.

He also made a strong pitch for expanding the web of facilities to all farmers to attain estimated profit of Rs 3.20 lakh crore.

Referring to a report by National Council for Applied Economic Research (NCAER) which carried out a third party audit of the forecast services provided last year he noted 11.5 million farmers were benefited by the facilities during the year and sought to increase the coverage to all that is 90 million peasants in time to come.

The minister claimed fishing community too reported similar benefits last year and noted strengthening marine forecast services was high on the government’s agenda.

“According to NCAER timely forecast services to 11.5 million farmers through SMSes resulted in profit of Rs 42000 crore (on four principal crops) in GDP in a year.

“The profit is estimated to increase up to Rs 3.20 lakh crore if we manage to cover each of the farmers under the services. We are taking efforts for that” he told reporters here.

Stating agro­meteorological advisory services (AAS) are being provided from 130 centres across 633 districts in the country currently Harsh Vardhan said the network will be expanded at sub­district level with the help of NGOs.

“We will provide crop­specific information to farmers. Based on such scientific information they can decide on whether to delay sowing of a crop or sow some other crop for a shorter period if they should use pesticides or not what to do if heavy rainfall is predicted to occur” he said.

The minister though did not specify any deadline by when all the farmers are expected to be brought under the net of the services saying it is an on­going process.

“When we took charge only two million farmers were benefited by forecast services. Now according to the report 11.5 million farmers are being benefited. So we will continue to witness rise in number” Vardhan said.

The minister also said similar economic benefit expected when fishermen are provided with timely forecast services in terms of potential fishing zones (PFZ) and adverse conditions.

Union Minister of State for Science and Technology and Earth Sciences Y S Chowdary also attended the briefing. (Reopens DEL31).

The GDP contribution of PFZ and Ocean State Forecasting services for the fisheries sector has beenassessed at 3.9 per cent in 2012­13 from 1.9 per cent in 1995­96 and can potentially increase to 7.8 per cent. Accordingly the additional income to fishermen is aggregated at Rs 3034 crore annually Vardhan said.

“There are 72 coastal districts where there are fisheries harbours. We will engage fishermen from there in awareness and training programmes” he said adding the ministry has been asked to prepare action plans to achieve these targets by 2019.

NEW DELHI: Indian farmers had a difficult year in 2015 and their prospects are unlikely to improve in 2016 a report by economic policy thinktank NCAER said.

The research policy institute said according to its estimate growth in agriculture and allied sector in the second quarter of FY 201516 is likely to be 2.2 per cent as compared to 1.9 per cent in the first quarter.

Commenting on the report the Economic and Statistical Adviser in the Ministry of Agriculture Sangeeta Verma said “Government is taking the challenges facing the agricultural sector particularly farmers very seriously. It has initiated a string of measures to tackle these challenges.”

According to the NCAER report wheat production in marketing year 201617 is expected to be lower at 85 million tons as compared to the already poor 2015 production of 88.9 million tons due to poor weather and wheat exports are likely to remain negligible.

“The 201516 rabi rice production is expected to be somewhat lower than the 201415 production due to poor postmonsoon rains and lower water levels in reservoirs” the report said.

Rabi rice exports are forecast to decline to 9.0 million tonnes from 11.8 million tons in marketing year 201415
it added.

The report noted that external factors continue to remain less conducive to Indian agricultural exports this year as was the case last year.
 

Published in: The Economic Times January 13 2016

NEW DELHI (January 13 2016) – Battling extremes of drought and unseasonal rains complicated now by a warm winter the Indian farmer had a difficult year in 2015 and his prospects are unlikely to improve in 2016. This has resulted in farmer distress and may lead to a decline in food-grain output in 2016 for the second straight year says NCAER’s latest report on the short-term agricultural outlook for the 2016 rabi season released today. The NCAER 2016 Rabi Report estimates growth in agriculture and allied sector gross value added in the second quarter of FY 2015-16 to be 2.2 per cent as compared to 1.9 per cent in first quarter. Overall agricultural growth in 2015-16 is likely to be moderate at best and is expected to remain unchanged from the 2014-15 growth rate of 0.2 per cent. The NCAER report also throws light on the scenario for prices of major food articles (primary articles like vegetables fruits and cereals) predicting higher inflation in the next 3-4 months while prices remain moderate for manufactured or processed food products (such as dairy edible oil and grain mill).

These and other findings were discussed today at a national workshop on the Indian Agricultural Outlook: the 2016 Rabi Season and Medium-term Prospects. The findings come from ongoing research at NCAER the National Council of Applied Economic Research in New Delhi that is supported by the National Food Security Mission of the Ministry of Agriculture & Farmers Welfare. It is also been supported by the UN’s Food and Agricultural Organisation.

Smt. Sangeeta Verma Economic and Statistical Adviser in the Directorate of Economics and Statistics in the Ministry of Agriculture in releasing the NCAER Rabi Report today noted that “The Government is taking the challenges facing the agricultural sector particularly farmers very seriously. It has initiated a string of measures to tackle these challenges. These measures include the launching of an e-marketing portal for farmers promotion of irrigation schemes at various levels that replicate successful schemes at the state level and the launch of a comprehensive national crop insurance program.” She noted the Government’s concern about the high and rising prices of pulses and emphasized that “this necessitates extensive agricultural research done in an academically robust and professional manner.” She mentioned that these issues are under intense discussion in the Government.

The workshop offered an important opportunity for the Indian policy and economic research community to discuss agricultural policies in ways that allow them to trace the economy-wide implications of such policies using specialized tools developed at NCAER. The daylong discussion by economists and agricultural experts on a variety of policies and their impacts provided insights for government policymakers to improve their understanding of India’s short and medium-term agricultural prospects in the next 3 to 5 years.

While launching the National Workshop Dr Shekhar Shah Director-General NCAER noted “Between droughts and downpours it is the Indian farmer who pays the price. The poor crop and price outcomes expected this rabi season is a graphic reminder of the vulnerability that Indian agriculture still faces. Between the vagaries of the weather and the inability of policymakers to design and implement sensible policies in agriculture whether to do with irrigation subsidies marketing or supply chains the India farmer ultimately gets squeezed. And this then leads to more sops rather than structural reforms. Breaking out of this vicious cycle does not require rocket science. We have the answers. But it does require policymakers to take a realistic view of both technical solutions and the politics of agricultural reforms and map a strategy for sequencing successful reforms whether it is in cereals or sugar-cane or oil-seeds or pulses based on solid evidence of what works and what the rural voter will accept. This has to be one of the highest reform priorities for the government.”

The findings of the NCAER report are based on a comprehensive assessment of farm input prices and availability monsoon rainfall market demand conditions and government policies impacting this year’s rabi and kharif crop production. Wheat production in marketing year 2016-17 is expected to be lower at 85 million tons as compared to the already poor 2015 production of 88.9 million tons due to poor weather and wheat exports are likely to remain negligible. The 2015-16 rabi rice production is expected to be somewhat lower than the 2014-15 production due to poor post-monsoon rains and lower water levels in reservoirs. Rabi rice exports are forecast to decline to 9.0 million tonnes from 11.8 million tons in marketing year 2014-15.

While introducing NCAER’s short and medium-term agricultural scenarios the principal author and team leader of the NCAER study Dr Rajesh Chadha NCAER’s Senior Research Counselor remarked that “The present Rabi report provides a comprehensive assessment of the challenges arising due to aberrant rainfall patterns despite extensive investment in irrigation technology and sharing of best practices. The report covers indicators of supply and demand for major food commodities both in the domestic economy and the global markets. External factors continue to remain less conducive to agricultural exports this year due to a better global production outlook and large carryover stocks for most traded commodities such as wheat rice maize and soybean/soybean meal except in the case of sugar.”

The study highlighted the severe supply-side bottlenecks that persist in Indian agriculture including poor logistics outdated marketing arrangements inadequate cold storage facilities and lack of processing facilities. These continue to hurt supply and the availability of food items such as pulses and perishable food products. Dealing with these domestic structural distortions affecting the production storage transport and marketing of agricultural production should be at the top of the agenda for Indian policymakers if they wish to take Indian agriculture into the 21st century.

On the external front the NCAER report finds that global food markets are likely to have remain well stocked and therefore were less volatile in 2015-16. As a result international prices of most commodities have remained well below their prices a year ago although projections show that most commodity prices are likely to firm up modestly in 2016-17. The report noted that external factors continue to remain less conducive to Indian agricultural exports this year as was the case last year. This was due to a better global production outlook and large carryover stocks for most commodities traded by India. Indian exports could face tough competition in the global market as domestic prices are likely to rule above world prices. There could be an increase in the import of pulses which along with the recent weakening of the Indian rupee against the U.S. dollar could lead to higher prices for Indian consumers.

Indian farmers had a difficult year in 2015 and their prospects are unlikely to improve in 2016 a report by economic policy thinktank NCAER said.

The research policy institute said according to its estimate growth in agriculture and allied sector in the second quarter of FY 2015-16 is likely to be 2.2 per cent as compared to 1.9 per cent in the first quarter.

Commenting on the report the Economic and Statistical Adviser in the Ministry of Agriculture Sangeeta Verma said “Government is taking the challenges facing the agricultural sector particularly farmers very seriously. It has initiated a string of measures to tackle these challenges.”

According to the NCAER report wheat production in marketing year 2016-17 is expected to be lower at 85 million tons as compared to the already poor 2015 production of 88.9 million tons due to poor weather and wheat exports are likely to remain negligible.

“The 2015-16 rabi rice production is expected to be somewhat lower than the 2014-15 production due to poor post-monsoon rains and lower water levels in reservoirs” the report said.

Rabi rice exports are forecast to decline to 9.0 million tonnes from 11.8 million tons in marketing year 2014-15 it added.

The report noted that external factors continue to remain less conducive to Indian agricultural exports this year as was the case last year.