The coincident happening of high nutrient rising prices and big foodgrain stocks in our garners has been a affair of widespread concern in India. The purpose of this paper is to understand the basicss of our foodgrain market, foreign militias policy that leads to this state of affairs and to propose policies for rectifying this. The cardinal statement of the paper is that, in making a better foodgrains policy, it is imperative that we look at the full system of nutrient production, nutrient procurance and the release and distribution of nutrient.[ 1 ]The paper will besides see the relationship between developments schemes, poorness and inequality with relation to the Abundant Foodgrain Stocks, Ample Foreign Exchange Reserves in India. It is really unlogical to believe that a state holding an abundant nutrient grain stock, ample foreign exchange modesty is still hungering in poorness. Approximately 35 % of the citizens of the state are beckoning under deficit of nutrient supply which ceases them to hold a proper repast in a twenty-four hours. We are populating a state where rich becomes richer and hapless becomes poorer every twenty-four hours.

The writer in this paper will discourse, how the above three are interlinked as we see on the one manus, the growing of the nutrient processing industry by springs and bounds supplying assortments of nutrient viz. fast nutrients, debris nutrients etc. , which resulted in wellness upsets among the flush ; and on the other manus acquiring equal nutrient has remained a semblance for 1000000s worldwide. Hundreds of people suffer from diseases due hungriness, malnutrition etc. , finally taking to deceases. The most vulnerable groups are kids and adult females, particularly pregnant and lactating, and seniors, who are lame and unable to gain their nutrient on their ain. Even the UNICEF study indicates that India ranks foremost among the universe states with respect to high malnutrition rate. India even has the differentiation of highest morality rate. It has been said in article 25 ( 1 ) of the cosmopolitan Decleration of Human Rights 1948 that right to nutrient and right to be free from hungriness are the human rights and human-centered Torahs.

Liberalization has radically changed India ‘s foreign exchange sector. Indeed the liberalisation procedure itself was sparked by a terrible Balance of Payments and foreign exchange crisis. Since 1991, the stiff, four-decade old, fixed exchange rate system full with terrible import and foreign exchange controls and a booming black market is being replaced with a less regulated, “ market driven ” agreement. While the rupee is still far from being “ to the full drifting ” , the nature of intercession and scope of independency tolerated have both undergone important alterations. With an surfeit of foreign exchange militias, imports are no longer viewed with fright and incredulity.[ 2 ]

Poverty, foodgrains vis-a-vis Indian reforms

Poverty is non merely a status that prevents underprivileged persons and households from fulfilling their basic demands or take parting to the full in society but it is a socio-economic phenomenon, which on a big graduated table has wide-ranging effects on society as a whole: the growing and the composing of the population ; its wellness and degree of civilization ; form of colony and migration ; economic development ; political stableness ; and environmental issues. Poverty is a pestilence impacting all parts of the universe in the 1990s and it has many faces and dimensions. The political, economic, societal and cultural dimensions of Poverty all have their ain roots. There are differences between states sing the factors that cause poorness and want: the stagnancy and diminution of economic growing ; low productiveness ; a hapless degree of public services ; marginalisation of sectors of society because of limited entree to information and instruction ; gross in equalities in income distribution ; exclusion from paid employment because of favoritism, etc. One of the most of import and most common manifestations of poorness is the denial of entree to the basic necessities of human being.

From the beginning, Indian development scheme ne’er presumed to shut the spread between rich and hapless: ‘equality ‘ so the prevailing wisdom went, ‘is a luxury that merely a rich state can afford ‘ . In the mid-70s, the concentration of 49 per cent of national income among the top 20 per cent of families ( with merely a 6 per cent portion among the bottom 20 per cent ) was even more skewed than income distribution in India. After a century or more of close stagnancy, the post-Independence period in India experienced a historically unprecedented growing of agricultural production.[ 3 ]

Factors such as instruction, skill formation, better infra-structure, and investing in development activities and so on provided today will hold an impact on the support entree tomorrow. Attainment of ego sufficiency in nutrient grains at the national degree is one of the state ‘s major accomplishments in the post-independence period. After staying a nutrient shortage state for about two decennaries after independency, India became mostly self-sufficing in foodgrain production at the macro degree. There have barely been any foodgrain imports after the mid-1970s. Foodgrain production in the state increased from about 50 million metric tons in 1950-51 to around 233.9 million metric tons in 2008-09. The growing rate of foodgrains has been around 2.5 per cent per annum between 1951 and 2006-07. The production of oil-rich seeds, cotton, sugar cane, fruits, veggies, and milk has besides increased appreciably.[ 4 ]

There are both short tally and long tally jobs in Agriculture. Farmers ‘ self-destructions continue unabated, even increasing in some provinces, as growing rate in output is on the diminution. Farming is fast going a non-viable activity. Further range for addition in net seeded country is limited. Land debasement in the signifier of depletion of dirt birthrate, eroding, and H2O logging has increased. There has been decline in the surface irrigation enlargement rate and a autumn in the degree of the land H2O tabular array. Exposure of domestic agribusiness to international competition has resulted in a high order of volatility in monetary values. Disparities in productiveness across parts and harvests, and between rainfed and irrigated countries have increased. Long term factors like steeper diminution in per capita land handiness and shrinkage of farm size are besides responsible for the agricultural crisis. Land issues such as SEZs, land traveling to non-agriculture, disaffection of tribal land etc. are going of import.[ 5 ]

For illustration, handiness and entree to nutrient can increase nutrition among the families. Food handiness is a necessary status for nutrient security. India is more or less self sufficient in cereals but shortage in pulsations and oil seeds. Due to alterations in ingestion forms, demand for fruits, veggies, dairy, meat, domestic fowl, and piscary merchandises has been increasing. There is a demand to increase harvest variegation and better allied activities.[ 6 ]

Poverty is a state of affairs that gives rise to a feeling of a disagreement between what one has and what one “ should hold ” .

Berstein Henry ( 1992 ) has identified the undermentioned dimensions of poorness:

Lack of support schemes

Inaccessibility to resources ( money, land, recognition )

Feeling of insecurity and defeats

Inability to keep and develop societal dealingss with others as a effect of deficiency of resources.

Approximately 74 % of India ‘s population lives in small towns. The incidence of poorness is much higher in small towns -roughly 39 per cent of the rural population. Agriculture is a beginning of support for 70 per cent of the population but agribusiness histories for less than 40 per cent of the national income.

In this background, the Supreme Court passed inter-alia the undermentioned order ;[ 7 ]

We would wish the Cardinal Government to inform us what steps they have taken to continue the staying food-grains procured by them. “ The Food Corporation of India must decently measure capacities of their godowns and procure merely that much food-grains which can be decently preserved. We have to develop a civilization of nothing tolerance corruptness. Unless immediate and pressing stairss are taken, the ultimate consequence will be on the poorest citizen who is deprived of legitimate entitlement for food-grains. We must ensureA that every hapless individual is ensured of two square repasts per twenty-four hours. ”

Reasoning the treatment on the causes of poorness, it may be said that poorness in India demands to be perceived in relationship to three factors:

Diverse historical and cultural roots of India attitudes, thoughts, beliefs and value, that is people strong linkage with the yesteryear

Cardinal relationship between the biological and psychological features of adult male

During and after release from the British regulation.

As such poorness existed in India, it was because of the economic policies of the British authorities, deficiency of inducements to the people, deficiency of instruction and technological cognition, lassitude, unfeelingness and development of the rural people, and spiritual and societal barriers to command the household size.

Inflationary force per unit areas have besides increased poorness. With 1960-61 as the base, the index of sweeping monetary values has been increasing every decennary, every twelvemonth. The one-year rate of rising prices was 13.6 per cent in April 1991 which was brought down to 7.3 per cent in March 1997 ( the Hindustan times April 1997 ) .The lessening in rising prices rate was the consequence of[ 8 ]

Addition in agriculture production ;

Decrease in the rising prices shortage of cardinal budget ( which decreased from 8.4 % of GDP in 1997-98 )

Decrease in chronic dependance on adoptions

Reforms in the quality of revenue enhancement

Population growing is another most of import factor in poorness. Different plans which have been started to control the poorness in India are:

IRDP: The incorporate rural development programme is a major instrument of the authorities to relieve poorness. Its aim is to enable selected households to traverse the poorness line by taking up self-employment ventures in a assortment of activities like agribusiness, gardening and animate being farming in the primary sector, weaving and handcrafts in the secondary sectors, and service and concern activities in the third sector.

TRYSEM: The strategy of developing rural young person for self-employment was started on August 15, 1979 to supply proficient accomplishments to the rural young person the age group of 18-35, and belonging to households populating below the poorness line are eligible for preparation.

NREP: The National Rural Employment programme was planned for making extra employment chances in the rural countries with the aid of excess foodgrains. Initially this programme was called for Food for Work Programme ( FWP )

RLEGP: The rural landless employment warrant programme aimed at supplying auxiliary employment to the hapless on public plants at a really low pay of Rs 3 per twenty-four hours.

Jawahar Rozgar Yojna: This plan was announced in April 1989.Under the strategy, it is expected that at least one member of each hapless household would be provided with employment for 50 to 100 yearss in a twelvemonth at a work topographic point near his/her abode. About 30 per cent of the occupations under this strategy are reserved for adult females.

Antyodaya programme: ‘Antyodaya ‘ agencies development ( udaya ) of the people at the bottom degree ( ant ) , which is, the poorest of the hapless. The programme was initiated by the authorities of Rajasthan on October 2, 1977 for particular aid to the people below the poorness line. The thought was to choose five of the poorest households from each small town every twelvemonth and to assist them in their economic improvement.

Garibi hatao and bekari hatao programme: The Garibi Hatao motto was given by Indra Gandhi in March 1971 at the clip of national elections while the Bekari Hatao motto was given by the All India Congress Committee ( AICC ) at its one-year session in April 1988.

Different steps may be turn outing to be more helpful in cut downing poorness:

Reducing the financial shortages by the cardinal and the province authoritiess.

Raising imports limitations and hiking up exports.

Controling the adoptions.

Selling units in public sectors which are invariably undergoing losingss.

Roll uping more revenue enhancements.

Bettering cost effectivity by supervising public assistance outgo.

Making extra financess available in the field of trade and commercialism and commanding the bank rate every bit good as the capital eroding by doing the realisation of bad debts easier.

Loans to the weaker subdivisions of society may be provided at preferable rates while the extent of subsidy may be kept within sensible bounds.

Lowering imposts duties for doing the Indian economic system internationally competitory.

Removing restraints on capital intensive substructure industries, such as power, irrigation and telecommunication so that these may develop competitory market constructions.

Growth in agribusiness economic system must be accelerated since two-third population is still dependent on agribusiness.

Integrating assorted strategies for rural development.

Reducing authorities outgo and authorities employees.

Assorted surveies carried out by experts and academicians have shown that no programme has been able to do a dent on the poorness degree of the rural people. A big mass of villagers remain pine awaying without basic demands. Black money is unaccounted money, revenue enhancement evaded, concealed income and unrevealed wealth. Many clever ways are employed by industrialists, export houses, the movie industry, business communities and the corporate sectors to juggle the tax collector in the ongoing of fell and seek. This money is normally spent on conspicuous ingestion and corrupt patterns to farther generate income and wealth.

forex vis-a-vis Indian reforms

About from a place of bankruptcy in the twelvemonth 1990-91, with a series of reforms the foreign exchange militias of India merely non seen an rush, but besides under gone a alteration in its composing. Foreign currency assets both in the pre- economic reforms phase ( 1980s ) and post economic stage has remained the dominant constituent of the foreign exchange militias. Components like flow of foreign investing flows, external commercial adoptions, NRI sedimentations and alteration in rating have been the major subscribers to the foreign exchange militias, whereas in 1980s the state of affairss were different. Decrease in short term debt and debt service ratio have and some policy reforms refering to NRI sedimentations have been contributing for cut downing volatility in the foreign exchange militias.[ 9 ]

Harmonizing to debt-based index of adequateness step, it is by and large perceived that one state should keep militias for four to five quarters short term external debt in progress. In India, Short term external debt ( STED ) has n’t increased since 1990-91, while foreign currency assets ( FCA ) have grown about 100 times. This has made Foreign Exchange Reserves/STED ratio better in last decennary as mentioned in a paper by Sanjay Sehgal and Chandan Sharma ( 2008 ) . The ratio of volatile capital flows ( which is defined to include cumulative portfolio influxs and short-run debts ) to the militias declined from 146.6 per cent as at end-March 1991 to 46.2 per cent as at terminal March 2007 and further the ratio had declined to 45.4 per cent at end-March 2008 ( Half Yearly Report on Foreign Exchange Reserves, RBI, 2008-09 ) . The ratio reveals that minimal opportunity of happening of currency crisis as the militias are relatively really high.

Beginning: A Study of Adequacy, Cost and Determinants of International Reserves in India, sanjay Sehgal & A ; Chandan Sharma ( 2008 )

Major beginnings of Foreign Exchange inflows into Militias: Major constituents such as cyberspace of exports-imports, foreign direct investing, portfolio investing, external aid, external commercial adoptions are given in BoP of the state are rather clear, but other beginnings like investing income, banking capital and ‘other capital ‘ demands farther amplification. Banking capital comprises assets and liabilities of authorised traders, NRI sedimentations and motion in balance of foreign cardinal Bankss and international establishments like, World Bank, IDA, ADB, IFC, etc. maintained with RBI. ‘Other Capital ‘ is a residuary point and loosely includes delayed exports grosss, financess raised and held abroad by Indian corporate, India ‘s subscriptions to international establishments, quota payments to IMF. In footings of statistics provided in the BoP the foreign exchange militias: the cyberspace of Current Account and Capital Account are the major beginning of accumulation of militias. However, BoP Statistics does non supply some of the constituents like alteration in rating of foreign exchange and Gold militias for roll uping entire foreign exchange militias.[ 10 ]

degree and composing of the militias:

In over one and half decennaries of economic reforms, the degree of foreign exchange militias has steadily increased from US $ 5.8 billion as at end-March 1991 to US $ 199.17 billion by end-March 2007 and farther to US $ 309.72 billion by March 2008. The tendency in militias is mostly governed by the foreign currency assets constituent, which has increased chiefly due to lift in foreign investing influx, external commercial adoptions and bank capital.

Chart-3: Growth Rate of Foreign Exchange Militias


In India ‘s instance, some of the addition in militias during 2002-03 was the consequence of the grasp of the Euro and the Nipponese Yen against the USD.

However, foreign exchange intercession by the RBI was the chief cause of the physique up of militias during 2002-03. Harmonizing to RBI informations, out of $ 20.8 billion that were added to militias during April-December 2002, $ 3.8 billion were added because of rating alterations, while $ 13.3 billion represent capital influxs and 3.7 the current history excess.

In April 2010, India ‘s forex militias totaled US $ 279.6 billion. By April 15, 2011, this figure had increased to US $ 308 billion. India ‘s foreign exchange militias increased as we moved in front in financial 2010-11. As informations given in the tabular array below shows, while in April 2010, India ‘s foreign exchange militias totalled US $ 279.6 billion ; in September 2010 this figure had increased to US $ 292.9 billion. Most recent Numberss show that the state ‘s foreign exchange militias have shot up further traversing the US $ 300 billion grade. With this degree of militias, India is the 7th largest holder of foreign exchange militias in the universe.

Table 13 – Foreign Exchange Reserves in US $ Million[ 11 ]

Forex Militias are as follows:

April 2010 279,633

May 2010 273,544

June 2010 275,710

Aug 2010 283,142

Sept 2010 292,870

Oct 2010 297,956

Dec 2010 297,334

Jan 2011 299,224

Feb 2011 301,592

Although other states with immense Forex militias have strengthened their external place on the footing of positive or excess trade and current history, in instance of India this immense construct up of militias is mostly due to inflow of financess on the capital history. However, this big retention of forex militias has attracted a batch of attending and several options suggested on how to optimally use these militias.[ 12 ]


So, we see a state whose foreign modesty has been increasing since 1991 is still under terrible ruin of poorness with increasing forex and production of foodgrains. Though we last witness the Bengal famine some decennaries back which shows the state better economic growing but to come out with an emerging and developed economic system we still need set a idea on it. Corruption, Inflation, Black money etc all ceases one state to emerged as better economic system in the universe. Hundreds of people are still hungering for a nutrient as on one side we leave them to rotten in an unfastened air. It ‘s really of import for a state like India whose population had crossed 100 million to do a proper docket and propagate the same in the rural countries particularly where 100s of people still experience helpless for the same. At the terminal one can merely state that if there still exist, a struggle of idea between Executive[ 13 ]and bench than it will be really hard to come out from the same.