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Technology Plays a Crucial Role in Driving Change

The agricultural sector in India has made significant progress since gaining Independence, thanks to technological advancements and government interventions. The Green Revolution, in particular, played a crucial role in increasing food grain production by three times, demonstrating the importance of science and technology in the growth of agriculture. Today, India.

The agricultural sector in India has made significant progress since gaining Independence, thanks to technological advancements and government interventions. The Green Revolution, in particular, played a crucial role in increasing food grain production by three times, demonstrating the importance of science and technology in the growth of agriculture. Today, India is the world’s largest producer of milk, pulses, and spices, and ranks second in the production of wheat, rice, cotton, sugarcane, fruits, and vegetables. It has also excelled in other agricultural commodities. This success is further reflected in the ₹4.2 lakh crore worth of agricultural exports made in FY2023.

Although it is the largest producer of food, the food system is confronted with several challenges such as mounting pressure on natural resources, climate change, fragmented land holdings, expanding urbanization, and high rates of malnutrition among children. As a result, meeting the growing demand for food in the face of changing climatic conditions will require a dedicated focus on sustainability and efficiency of production systems through the use of advanced farm practices and technology.

Digital technology has emerged as a crucial factor in modernizing agriculture in India. The government’s focus on digital inclusion and mechanization has made it easier for farmers across the country to adopt advanced technologies. The deployment of ‘Kisan drones’ for crop assessment and land records digitization, along with the widespread use of mobile applications such as Kisan Suvidha and e-NAM, has transformed the way farmers access information and markets. The number of markets linked to the e-NAM platform increased to 1,389 in 2023, enabling online trading of 209 agriculture and horticulture commodities.

Moreover, the integration of artificial intelligence (AI) and predictive analytics holds immense potential in optimizing agricultural practices and reducing production risks. Precision agriculture, digital interfaces, and the use of advanced technologies, techniques, and tools are increasingly being utilized in agriculture to monitor weather, plant and soil indicators, and provide AI-based advisories to farmers. However, ensuring the accessibility and usability of these technologies for farmers of all backgrounds remains a critical challenge that requires concerted efforts from policymakers and stakeholders.

Strategies and protocols for the use of drones, sensor-based automation, solar photovoltaic pumping systems, etc. will pave the way for their large-scale adoption by farmers. In the 2023-24 budget speech, the government highlighted the Agriculture Accelerator Fund, aimed at promoting agri-startups by young entrepreneurs in rural areas, with a focus on affordable solutions for agricultural problems and the adoption of modern technologies. The “Innovation and Agri-Entrepreneurship Development” program is a part of the Rashtriya Krishi Vikas Yojana (RKVY) and Agri UDAAN (1-6) initiative. Its main objective is to empower agri-startups and entrepreneurs with the necessary skills, knowledge, and networks to promote sustainable agricultural growth and create employment opportunities. The startups aim to improve efficiency and sustainability in agriculture by leveraging technology and targeting farmers, traders, and the entire distribution chain.

The technological and policy interventions in Indian agriculture have brought about transformative impacts, which cannot be denied. However, to maintain this momentum amidst evolving challenges, continuous innovation, adaptive governance, and inclusive development strategies are required. By leveraging technology, empowering farmers, and promoting sustainable practices, India can pave the way for a resilient and inclusive path towards agricultural prosperity and food security in the 21st century. It is important to view agriculture as a holistic value chain that involves farming, processing, warehousing, and retailing. Adequate marketing infrastructure must be created at the farm gate level, sustainable marketing linkages must be promoted, and scientific pricing for agriculture products should be ensured to foster true competition in the market. The Agriclinics and Agribusiness Centres Scheme of the Government of India supported by NABARD should be implemented on a larger scale. Such programs can boost agri-entrepreneurship, increase farmers’ incomes, and enhance the overall welfare of the rural economy.

Laxmi Joshi is Fellow and Saurabh Bandyopadhyay is Senior Fellow at NCAER. Views are personal.

Africa’s bold bargain with global finance

Could a continental consensus work as Africa’s ultimate bargaining chip? 

In the heart of Africa’s economic crucible, a seismic shift is underway. The continent’s leaders, weary of a global public and private financial architecture that has long failed them, are now wielding their collective voice as a potent weapon. As the world grapples with crises – ranging from climate upheaval to geopolitical tensions – Africa stands at a crossroads of opportunity and urgency. The delicate dance of balancing social stability, development imperatives and sustainable debt levels has become untenable.

With unwavering resolve, Presidents Nana Akufo-Addo of Ghana, William Samoei Ruto of Kenya, and Hakainde Hichilema of Zambia have stepped onto the global stage, proposing a radical overhaul of financial norms and a reimagining of Africa’s destiny.

To bridge gaps in the primary sector and keep pace with futuristic industries like renewables, green hydrogen, artificial intelligence, electric vehicles and semiconductors, Africa requires comprehensive – not selective – investment. The continent remains a promising destination for debt, equity and fund investments waiting for its turn. But a bold approach is needed to tap into the global financial landscape at large.

Africa’s offer

The three presidents have joined forces to propose practical solutions to leverage global finance in Africa. In an article in The Economist, they underline the urgency for a collective response and publicly communicate Africa’s commitment to global collaboration, outlining exactly what Africa strives to achieve.

They highlight five areas of engagement with global finance, from the overhaul of global financial architecture to the establishment of a robust institutional, legal and regulatory framework to manage the macro-financial risks of new global financial flows.

This global appeal, developed by elected officials, demonstrates Africa’s preparedness to receive global capital inflows responsibly. While this should not only reassure investors, financiers, philanthropists, non-governmental organisations and rating agencies, it could also mark the beginning of reducing the ‘perception premiums’ that Africa has long paid to attract investment and international assistance.

Rather than debating whether enough has been done or whether the multilateral system is biased against Africa, the focus should be on comprehending its interests and why those have been neglected by the international markets. In addressing the underlying causes, solutions can be created to benefit the financier and the recipient. But a successful solution is one that benefits everyone in Africa, which requires a continental consensus.

With multiple multilateral initiatives in progress to enhance access to private capital, fund climate resilience and provide debt relief, there is no better time. Replenishments to the International Development Association and the review of International Monetary Fund quotas are also currently underway.

However, the global finance pool is not as buoyant as some regard it to be. More stringent and competing liquidity worldwide is impacting all cross-border investments. As a result, investment flows have become increasingly selective and cautious. Even large emerging markets like China and India are seeing a preference for portfolio equity flows over direct investment. Hopefully, the postwar and post-conflict reconstruction processes (Ukraine, Gaza, Somalia, Yemen, South Sudan and elsewhere) will begin – further charging significant global finance and private capital.

Regional initiatives

The days of nations tweaking their regulatory frameworks and market regulations to attract capital flows are fading. Fortunately, many African countries have eased capital account restrictions, thus promoting macroeconomic stability and greater financial accessibility. Yet, several studies show that Africa is the most disconnected region when measured by the continent’s movement of goods, services, people and information.

While there is room for improvement, particularly in fiscal and monetary policies, Africa has made significant policy advancements for over a decade. The Regional Economic Communities, the African Continental Free Trade Area and the Program for Infrastructure Development in Africa are all examples of critical regional initiatives.

However, at the core of this continental vision must be more robust financial integration. The goal is to promote access to finance and capital market development within regional blocs. Organisations like the West African Monetary Institute and the East African Community Monetary Institute are working to harmonise monetary policies and enhance financial co-operation. But strategic, continent-wide initiatives stand to majorly improve Africa’s voice in global finance.

Green growth and climate resilience is especially integral to regional co-operation. While these initiatives aim to tackle environmental challenges and attract green finance investments, more is needed – particularly in line with the African Union’s Agenda 2063 for sustainable development and climate action.

A continental approach  

Progress is being made, but immense potential remains to fully leverage continental mechanisms in the global financial landscape. A continental approach will allow Africa to pool resources, share infrastructure and collaborate on large-scale projects. By integrating markets and production across multiple borders, economies of scale and scope can be harnessed. As a unified bloc, Africa can negotiate better terms in international trade agreements, investment deals and financial arrangements. Collective bargaining will strengthen Africa compared to individual countries negotiating in isolation. A continental view will also provide an opportunity for safety net arrangements against crisis and spread risk across diverse economies – reducing vulnerability to localised shocks.

Further to this, Africa can implement homegrown solutions to help promote the flow of investments and finance in the continent. For instance, a larger, more integrated market for goods, services and investments will stimulate intra-African trade, develop regional transportation networks, energy grids and digital connectivity spanning multiple countries, thereby benefitting economies at scale. Not only will this attract financing from regional and international sources, but it will also promote global growth in the long run.

The challenges – political differences among member states, capacity constraints, infrastructure gaps, regulatory complexities and funding constraints – should not be underestimated. Yet, the efforts and commitments from African governments, regional organisations, development partners and the private sector could propel Africa’s regional integration and collaboration agenda Adopting a continental view will allow Africa to overcome individual limitations and position itself strategically in the global economic landscape. Global finance could be more amenable and open to bring in risk capital into continental initiatives.

Despite economist Gunnar Myrdal’s optimistic prediction in 1968 that Africa would surpass Asia in growth, the continent’s economic prospects remain uncertain without a significant increase in capital inflow, retention and effective utilisation – or as the presidential troika puts it: more help to help itself.

Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, a Senior Non-Resident Adviser at the Bank of England, a Senior Adviser of the International Forum for Sovereign Wealth Funds and a Distinguished Fellow at the Observer Research Foundation America.

India Human Development Survey: March 2024

The IHDS Forum is a monthly update of socio-economic developments in India by the IHDS research community, based on the India Human Development Survey, jointly conducted by NCAER and the University of Maryland. While two earlier rounds of the survey were completed in 2004-05 and 2011-12, respectively, the third round has also been launched and surveys have already been conducted in a number of States.

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Safeguarding investors

Investor education is crucial for enhancing financial well-being. Enhanced opportunities and increased volatility, calls for fresh financial literacy efforts, as traditional programs may no longer suffice.

The curriculum needs updation to cover digital literacy, new investment risks, evolving financial structures, and governmental measures for investor protection and fraud prevention.

While progress has been made in investor protection, challenges persist.

Grassroots engagement through tailored workshops and digital outreach, coupled with long-term sustained handholding specifically of poor and rural households through protection of investors from imminent mis-selling to minimize frauds and vulnerabilities are needed to be followed by financial inclusion efforts.

The Financial Stability Development Council envisages financial education and financial inclusion as the twin objectives to promote prudent financial behaviour and informed investing, thereby optimizing financial well-being.

Dedicated funds such as IPEF of SEBI, DEAF of RBI and IEPF of IEPFA, MCA are also available for the purpose.

The IEPFA, in addition to promoting investor education and protection, is responsible for refund of unclaimed shares, dividends, matured deposits/debentures etc.

In India, to safeguard investor interest, regulatory bodies have set up grievance redressal mechanisms to handle stakeholder concerns. RBI’s ‘Complaints Management System (CMS)’, SEBI’s ‘SCORES’ (SEBI Complaints Redress System), IRDAI’s “Integrated Grievance Management System” (IGMS) and PFRDA handles pension matters through its website and helpline.

Trustworthy advisors

Given the instances of fraud, investors need to rely on trustworthy and registered financial advisors and carefully verify the latter’s credentials to protect themselves from financial frauds.

A simple unbiased, efficient system and timely redressal of complaints is of paramount importance in the context of building investor confidence in protecting their interests.

Sustaining a secure financial environment in this fast-changing scenario alongside robust governance and transparency standards, are necessary in enhancing the security and accessibility of investment opportunities. The ambit of intricate job of investor protection, extends beyond the regulatory frameworks and government interventions, casting investors themselves in a pivotal role.

This two-way process underscores the notion that while authorities strive to build robust safeguards and modern educational platforms, the onus equally falls on investors to navigate their financial journeys with discernment and prudence. Investors are encouraged to temper their aspirations with realistic expectations, exercising restraint over the allure of high returns without due diligence.

Protecting investors interest is not just a regulatory responsibility but a foundational element of the economic ethos. Financial policies, products and processes for investors need to be simple and accessible to the unserved/underserved.

Secure financial system

A focused approach, where regulatory investor protections are complemented by investor education and vigilance, forms the bedrock of a healthy, secure, and thriving financial ecosystem.

By fostering this dual responsibility, India will witness a more resilient and empowering investment landscape, where consumers are not just passive recipients of protection but active participants in safeguarding their financial futures.

Timely steps towards a well-coordinated and comprehensive investor protection strategy that integrates into the National Strategy for Financial Education is the call of the hour.

The writer is IEPF Chair Professor at NCAER. Views expressed are personal

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