Nature and scope of agricultural production economics
The nature of agricultural economics is such that it obtains most of the principles from general economics, thus there is no basic difference between general and agricultural economics. Thus the need to separate these two is that agricultural economics does not imply direct application of the principles but before application they are modified so that their postulates totally tally with the situations. These modifications are so large and varied that there is a complete justification for studying it as a separate branch of knowledge.
Terminology
Microeconomics
Macroeconomics
Static economics
Dynamic economics
Resources
Wants
Profit
Utility
Consumption economics
production economics
Production function
Marginal product
Total product
Average product
Elasticity of production
Nature of agricultural economics:
Micro as well as Macro
When the subject of study is individual farmer then it is micro-economics and when we study agricultural economy as a whole then it is called macro-econoimcs
Static as well as Dynamic
The basic difference between the two is that in former , time variable is not taken into account while the latter analysis deals with a period of time. In the present day dynamic concept is gaining momentum.
Applied science or Pure science
Agriculturist economics such as Frosten and Leoger have classified it as an applied science as it is concerned with the identification, description and classification of economic problems of agriculture. Thus, agricultural economics is concerned with the evolving of appropriate principles that govern the amount of land, labour, and capital that the farmer should use to maximize his profit and using the factors efficiently.
Science or Art
Agriculture is the science and art of cultivation of crops and raising the livestock and is not only a mode of livelihood but also a way of life. Agricultural production economics is a science because it relies on the principles and verifications of the data. It is an art because it deals with the various ways of application of the principles and to suit the conditions.
Scope of agricultural economics:
Agriculture sector is considered to be the most important in Indian scenario. The scope of agricultural production economics includes production, distribution, consumption and government activities in relation to agriculture and farm enterprises. To be more specific, the scope of agricultural economics can also be analysed on the political aspect. Self sufficiency in food produce can reduce foreign dependence fro food supply and raw materials , specially in times of crisis. There is a large scope of agri. economics in various factors of production also viz. land, labour, capital, organization etc.
The scope of agricultural production economics as quoted by Taylor “ Agricultural economics deals with the principles which underline the farmers’ problems of what to produce and how to produce what to sell and how to sell in order to secure the largest net profit for himself consistent with the best interest of the society as a whole. ”
Principles applied in Agricultural Production Economics
1. Law of equi-marginal return
2. Law of diminishing return
3. Law of opportunity cost
4. Law of substitution
5. Law of comparative advantage
6. Principle of combining enterprises
7. Cost concepts and principles
Tuesday, March 11, 2008
fertilizer use
Fertilizer Use Boon or Bane
For
Fertilizer is an important component of dry land technology. For example, 20 pounds per acre (22 kilograms per hectare) of nitrogen are recommended where rainfall is less than 13 inches (330 millimeters), ranging up to 60 pounds per acre (67 kilograms per hectare) where more rain is available; those figures refer to the production of wheat, but they are applicable to other dry land-farming areas. Where average annual precipitation is less than 12 inches (300 millimeters), the use of nitrogen is limited to years where moisture outlook is exceptionally favorable. Nitrogen fertilizer can be applied either in fall or spring. Band placement or broadcast techniques are utilized. Good results are obtained from broadcast spring application of nitrate fertilizer, and fall application of ammonia has also been successful. Local climates and rainfall patterns also determine choice of fertilizer and time of application.
For India, there is an urgent need to narrow the wide ratio between nitrogen (N) and phosphorus (P) and potassium (K) consumption by stepping up P and K usage, which suffered markedly during much of the 1990s. By doing so, food security will be safeguarded and agricultural practices will be more sustainable. India would need about 25
Million tonnes (M t) of NPK in addition to 10 M t of organic and biofertilizer sources to produce about 246 M t of foodgrain required by 2010.
India’s introduction to fertilizer-responsive, high-yielding varieties (HYV) of rice and wheat during the 1960s made it possible to produce 15 to 20 tonnes of plant biomass (dry matter) per hectare per year. This productivity could be initially maintained with N fertilizer alone as the soil could provide much of the other nutrients needed by the crop. However, within a few years, the soil reserves of many nutrients were
Gradually exhausted and high yields were no longer possible by applying N alone. Therefore, a growing emergence of plant nutrient deficiencies occurred in areas of increasing crop intensity. During 1998-99, consumption of N, P2O5 and K2O in India was 11.3, 4.1 and 1.33 M t, respectively at 90 kg/ha. A sustained, imbalanced use of nutrients is reflected by the N: P2O5: K2O ratio which widened from 5.9:2.4:1 in 1991-92 to 8.5:3.1:1 in 1998-99. If the nutrient consumption pattern in 1998-99equaled the desired 4:2:1 ratio, the 11.32 M t of N would be matched with 5.66 million P2O5 tones (38 percent more than actual) and 2.83 million K2O tones (over twice actual K2O consumption). The challenge for government and industry alike is to meet or exceed this consumption level.
Long-term Experiments Emphasize Balanced Fertilizer Use
Findings from long-term fertilizer experiments have clearly shown how the high productivity of an N-driven system is short-lived and counter-productive. Continuous use of N alone can never produce sustained, high yields without addition of adequate P, K and other deficient plant nutrients. This can be verified by
the relatively higher P and K fertilizer use efficiencies and relatively lower N use efficiency in India during the 1980s and 1990sas compared to the 1970s.
The Dynamic Nature of Balanced Fertilization
A wealth of information on the dynamic nature of balanced fertilization in intensive cropping systems has become available from several long-term fertilizer experiments in which HYVs are grown. Results
Consistently show:
1) Intensive cropping with only N input is a short-lived phenomenon;
2) Omission of a plant nutrient (be it macro or micro) leads to its progressive deficiency as a result of
Heavy removals;
3) Sites initially well supplied with natural soil P, K or sulfur (S) become deficient when continuously cropped using N alone or S-free fertilizers;
4) Fertilizer rates considered as optimum still resulted in nutrient depletion at high productivity levels and, if continued, become sub-optimal rates.
More than anything else, experiments solidly demonstrated that a field producing 1,300 kg grain/ha from two crops grown without fertilizer could produce 7,420 kg grain (5.7 times more) under optimum plant nutrient application (data not shown). Responses to fertilizers in these experiments were always
in the order of NPK>NP>N. Continuous use of N alone produced the greatest yield decline at a majority of sites. Responses to N declined with the passage of time, while responses to P and K improved due to increased soil P and K deficiency.
Balanced Fertilization Includes Nutrients Other than NPK
Balanced fertilizer use today in India implies much more than NPK application. Almost 50 percent of over 200,000 soil samples analyzed have tested low (deficient) in zinc (Zn).Soil S deficiencies once considered to be confined to coarse-textured soils under oil seeds are now estimated to occur in a wide variety of soils in nearly 130 districts, and yield increases from application of S under field conditions have been recorded in over 40 crops. Likewise, in specific areas, the application of magnesium (Mg) and boron (B) has become necessary for high yields, greater plant nutrient use efficiency, and enhanced profits. These nutrient combinations represent the many facets of balanced fertilizer use. Therefore, feeding crops for high yields in India is no longer a simple NPK story. This in no way minimizes the importance of NPK (fertilizer pillars), but emphasizes that the efficiency of NPK and returns from their application can be maximized only when due attention is paid to other plant nutrient deficiencies.
In conclusion, Indian agriculture is now in an era of multiple plant nutrient deficiencies. At least five nutrients (N, P, K, S, and Zn) are now of widespread practical importance from an application point of
View. It would not be surprising if progressive farmers in several areas must apply four to six nutrients to sustain high yields of premium crops. Policies and strategies need to be developed to fully recognize the changing needs and dynamics of balanced fertilization. Towards this end, policy-makers, researchers, extension personnel, fertilizer industry, dealers, and farmers all have to contribute.
For feeding the enormously increasing world population it is necessary that cultivable fields are used optimally and so far we have not fallen short of the demands because of the scientific developments in the field of agriculture and the one discovery which has changed the face of agriculture around the world is the discovery of chemical fertilizers. It was the use of fertilizers only which gave positive results for the labour of cultivators in fields, helped them to remain in the same profession and fed the whole world despite shrinking graph of cultivable land. Green Revolution and other such activities would not have made history if the agrarians would not have learnt the benefits of fertilizers. So there is no need to make a hue and cry over the drawbacks of fertilizers. In fact it is not the use of fertilizers which is spoiling nature but excessive human greed which is over exploiting the biggest boon of agriculture with its excessive use.
Against:
The future for fertilizers
Future trends in fertilizer technology may be predicted by extrapolating from current developments. Mixtures and materials with high percentages of plant nutrients will dominate the field. Better ways of providing nitrogen, the most expensive of the three major nutrients, will be forthcoming, including increased use of anhydrous ammonia, ammonium nitrate, and urea. Non leachable nitrogen, for example, can be obtained through the urea–formaldehyde (ureaform) reaction, and ammonium metaphosphate offers a concentrated liquid product. Micronutrients, or trace elements, specific to particular geographical areas will come into increasing use, as will custom mixing and bulk selling of mixtures containing several nutrients based on reliable soil and plant data.
“Complete environment” seeding in which seed, fertilizer, and water are incorporated in a biodegradable (decomposable in the soil) tape may come into use; with the tape planted, no further fertilizer or water will be needed until growth is well established. Such techniques using biodegradable tapes have already been developed on a small scale for use by home gardeners. Finally, larger and more precise fertilizing machines will be developed and adopted.
Soil and water pollutants that may adversely affect agricultural operations include sediment, plant nutrients, inorganic salts and minerals, organic wastes, infectious agents, industrial and agricultural chemicals, and heat. Sediment is a resource out of place whose dual effect is to deplete the land from which it came and impair the quality of the water it enters. Aside from filling stream channels, irrigation canals, farm ponds, and irrigation reservoirs, sedimentation increases cost of water clarification. Suspended sediment impairs the dissolved-oxygen balance in water. The recreational value of farm ponds is diminished by sediment, while soil depleted farmland is reduced in value. Nutrients of plants become resources out of place when they appear in groundwater and surface water; in fact, they become serious pollutants. Unwanted aquatic plants are nourished by plant nutrients derived from agricultural runoff, feedlots and barnyards, municipal and rural sewage, and industrial wastes. Aquatic plants clog irrigation and drainage structures, thus increasing maintenance cost and reducing capacity. Nitrates and nitrites in groundwater, which can poison human beings and livestock, result from both agricultural and industrial operations. Inorganic salts and minerals that impair the quality of soil and water are derived from natural deposits, acid mine drainage, industrial processes, and drainage flow from irrigated areas. Salt accumulation on irrigated soils causes the most damage and loss in this category. A high proportion of sodium in irrigation water supply affects plant life adversely (Salinity). More than just a trace of boron is highly toxic; therefore, water used in municipal and industrial processes involving borax may not be usable for agriculture. All these are also supplied from Fertilizer use in abundant.
No need to say that the old method of agriculture was sustainable which lasted for centuries without having any adverse effect either on the climate, soil, water, humans or anywhere else. Definitely we do not need anymore chemical fertilizers in fields but effective use of natural resources along with natural fertilizers which will not have any adverse effect on anything and will boost the yield of agricultural products. We need to go near nature again for the solution of our problems and we will have to understand that nature was, nature is, and nature will always remain our best friend till we are not stopping unethical exploitation of ‘dear nature’.
For
Fertilizer is an important component of dry land technology. For example, 20 pounds per acre (22 kilograms per hectare) of nitrogen are recommended where rainfall is less than 13 inches (330 millimeters), ranging up to 60 pounds per acre (67 kilograms per hectare) where more rain is available; those figures refer to the production of wheat, but they are applicable to other dry land-farming areas. Where average annual precipitation is less than 12 inches (300 millimeters), the use of nitrogen is limited to years where moisture outlook is exceptionally favorable. Nitrogen fertilizer can be applied either in fall or spring. Band placement or broadcast techniques are utilized. Good results are obtained from broadcast spring application of nitrate fertilizer, and fall application of ammonia has also been successful. Local climates and rainfall patterns also determine choice of fertilizer and time of application.
For India, there is an urgent need to narrow the wide ratio between nitrogen (N) and phosphorus (P) and potassium (K) consumption by stepping up P and K usage, which suffered markedly during much of the 1990s. By doing so, food security will be safeguarded and agricultural practices will be more sustainable. India would need about 25
Million tonnes (M t) of NPK in addition to 10 M t of organic and biofertilizer sources to produce about 246 M t of foodgrain required by 2010.
India’s introduction to fertilizer-responsive, high-yielding varieties (HYV) of rice and wheat during the 1960s made it possible to produce 15 to 20 tonnes of plant biomass (dry matter) per hectare per year. This productivity could be initially maintained with N fertilizer alone as the soil could provide much of the other nutrients needed by the crop. However, within a few years, the soil reserves of many nutrients were
Gradually exhausted and high yields were no longer possible by applying N alone. Therefore, a growing emergence of plant nutrient deficiencies occurred in areas of increasing crop intensity. During 1998-99, consumption of N, P2O5 and K2O in India was 11.3, 4.1 and 1.33 M t, respectively at 90 kg/ha. A sustained, imbalanced use of nutrients is reflected by the N: P2O5: K2O ratio which widened from 5.9:2.4:1 in 1991-92 to 8.5:3.1:1 in 1998-99. If the nutrient consumption pattern in 1998-99equaled the desired 4:2:1 ratio, the 11.32 M t of N would be matched with 5.66 million P2O5 tones (38 percent more than actual) and 2.83 million K2O tones (over twice actual K2O consumption). The challenge for government and industry alike is to meet or exceed this consumption level.
Long-term Experiments Emphasize Balanced Fertilizer Use
Findings from long-term fertilizer experiments have clearly shown how the high productivity of an N-driven system is short-lived and counter-productive. Continuous use of N alone can never produce sustained, high yields without addition of adequate P, K and other deficient plant nutrients. This can be verified by
the relatively higher P and K fertilizer use efficiencies and relatively lower N use efficiency in India during the 1980s and 1990sas compared to the 1970s.
The Dynamic Nature of Balanced Fertilization
A wealth of information on the dynamic nature of balanced fertilization in intensive cropping systems has become available from several long-term fertilizer experiments in which HYVs are grown. Results
Consistently show:
1) Intensive cropping with only N input is a short-lived phenomenon;
2) Omission of a plant nutrient (be it macro or micro) leads to its progressive deficiency as a result of
Heavy removals;
3) Sites initially well supplied with natural soil P, K or sulfur (S) become deficient when continuously cropped using N alone or S-free fertilizers;
4) Fertilizer rates considered as optimum still resulted in nutrient depletion at high productivity levels and, if continued, become sub-optimal rates.
More than anything else, experiments solidly demonstrated that a field producing 1,300 kg grain/ha from two crops grown without fertilizer could produce 7,420 kg grain (5.7 times more) under optimum plant nutrient application (data not shown). Responses to fertilizers in these experiments were always
in the order of NPK>NP>N. Continuous use of N alone produced the greatest yield decline at a majority of sites. Responses to N declined with the passage of time, while responses to P and K improved due to increased soil P and K deficiency.
Balanced Fertilization Includes Nutrients Other than NPK
Balanced fertilizer use today in India implies much more than NPK application. Almost 50 percent of over 200,000 soil samples analyzed have tested low (deficient) in zinc (Zn).Soil S deficiencies once considered to be confined to coarse-textured soils under oil seeds are now estimated to occur in a wide variety of soils in nearly 130 districts, and yield increases from application of S under field conditions have been recorded in over 40 crops. Likewise, in specific areas, the application of magnesium (Mg) and boron (B) has become necessary for high yields, greater plant nutrient use efficiency, and enhanced profits. These nutrient combinations represent the many facets of balanced fertilizer use. Therefore, feeding crops for high yields in India is no longer a simple NPK story. This in no way minimizes the importance of NPK (fertilizer pillars), but emphasizes that the efficiency of NPK and returns from their application can be maximized only when due attention is paid to other plant nutrient deficiencies.
In conclusion, Indian agriculture is now in an era of multiple plant nutrient deficiencies. At least five nutrients (N, P, K, S, and Zn) are now of widespread practical importance from an application point of
View. It would not be surprising if progressive farmers in several areas must apply four to six nutrients to sustain high yields of premium crops. Policies and strategies need to be developed to fully recognize the changing needs and dynamics of balanced fertilization. Towards this end, policy-makers, researchers, extension personnel, fertilizer industry, dealers, and farmers all have to contribute.
For feeding the enormously increasing world population it is necessary that cultivable fields are used optimally and so far we have not fallen short of the demands because of the scientific developments in the field of agriculture and the one discovery which has changed the face of agriculture around the world is the discovery of chemical fertilizers. It was the use of fertilizers only which gave positive results for the labour of cultivators in fields, helped them to remain in the same profession and fed the whole world despite shrinking graph of cultivable land. Green Revolution and other such activities would not have made history if the agrarians would not have learnt the benefits of fertilizers. So there is no need to make a hue and cry over the drawbacks of fertilizers. In fact it is not the use of fertilizers which is spoiling nature but excessive human greed which is over exploiting the biggest boon of agriculture with its excessive use.
Against:
The future for fertilizers
Future trends in fertilizer technology may be predicted by extrapolating from current developments. Mixtures and materials with high percentages of plant nutrients will dominate the field. Better ways of providing nitrogen, the most expensive of the three major nutrients, will be forthcoming, including increased use of anhydrous ammonia, ammonium nitrate, and urea. Non leachable nitrogen, for example, can be obtained through the urea–formaldehyde (ureaform) reaction, and ammonium metaphosphate offers a concentrated liquid product. Micronutrients, or trace elements, specific to particular geographical areas will come into increasing use, as will custom mixing and bulk selling of mixtures containing several nutrients based on reliable soil and plant data.
“Complete environment” seeding in which seed, fertilizer, and water are incorporated in a biodegradable (decomposable in the soil) tape may come into use; with the tape planted, no further fertilizer or water will be needed until growth is well established. Such techniques using biodegradable tapes have already been developed on a small scale for use by home gardeners. Finally, larger and more precise fertilizing machines will be developed and adopted.
Soil and water pollutants that may adversely affect agricultural operations include sediment, plant nutrients, inorganic salts and minerals, organic wastes, infectious agents, industrial and agricultural chemicals, and heat. Sediment is a resource out of place whose dual effect is to deplete the land from which it came and impair the quality of the water it enters. Aside from filling stream channels, irrigation canals, farm ponds, and irrigation reservoirs, sedimentation increases cost of water clarification. Suspended sediment impairs the dissolved-oxygen balance in water. The recreational value of farm ponds is diminished by sediment, while soil depleted farmland is reduced in value. Nutrients of plants become resources out of place when they appear in groundwater and surface water; in fact, they become serious pollutants. Unwanted aquatic plants are nourished by plant nutrients derived from agricultural runoff, feedlots and barnyards, municipal and rural sewage, and industrial wastes. Aquatic plants clog irrigation and drainage structures, thus increasing maintenance cost and reducing capacity. Nitrates and nitrites in groundwater, which can poison human beings and livestock, result from both agricultural and industrial operations. Inorganic salts and minerals that impair the quality of soil and water are derived from natural deposits, acid mine drainage, industrial processes, and drainage flow from irrigated areas. Salt accumulation on irrigated soils causes the most damage and loss in this category. A high proportion of sodium in irrigation water supply affects plant life adversely (Salinity). More than just a trace of boron is highly toxic; therefore, water used in municipal and industrial processes involving borax may not be usable for agriculture. All these are also supplied from Fertilizer use in abundant.
No need to say that the old method of agriculture was sustainable which lasted for centuries without having any adverse effect either on the climate, soil, water, humans or anywhere else. Definitely we do not need anymore chemical fertilizers in fields but effective use of natural resources along with natural fertilizers which will not have any adverse effect on anything and will boost the yield of agricultural products. We need to go near nature again for the solution of our problems and we will have to understand that nature was, nature is, and nature will always remain our best friend till we are not stopping unethical exploitation of ‘dear nature’.
India : Infrastructure
India: Infrastructure
The six core and infrastructure industries, viz., electricity, crude oil, petroleum refinery products, coal, steel and cement, having a weight of 26.7 per cent in overall Index of Industrial Production (IIP) achieved 6.8 per cent during 2000-01. Several fiscal incentives were announced by the government for boosting investment in infrastructure projects. Ten-year tax holiday offered to projects in core sectors like roads, highways, waterways, water supply, sanitation and solid waste management systems can now be availed of during the initial 20 years. Projects in airports, ports, inland ports, industrial parks and generation and distribution of power can now avail of 10-year tax holidays during the initial 15 years. The facility of five-year tax holiday available to the telecommunication sector till 31 March, 2000 was reintroduced for units commencing their operations on or before 31 March, 2003. The concessions were extended to internet service providers and broadband networks. Tax incentives were made available to investors providing long-term finance to enterprises engaged in infrastructure. The Electricity Bill 2001 and the Communication Convergence Bill 2001 were introduced in Parliament.
Power: The generation of power has increased impressively in recent years. In 1990-91, India generated 6.6 billion kilowatt hour of electricity; in 1995-96 the figure was 380.1 billion kilowatt hour. The installed capacity, which was 1400 MW at Independence in 1947, has crossed 83,288 MW. The policy of inviting private sector has been well received; about 140 offers that can generate over 60,000 MW of power have came in.
Coal: Coal is the primary source for power generation in India. The country has huge reserves of coal, approximately 197 billion tonnes. A sufficient amount of lignite (brown coal used in thermal power stations) is also available.
India produced about 270 million tonnes of coal in 1995-96. The government now welcomes private investment in the coal sector, allowing companies to operate captive mines.
Petroleum and Natural Gas: The recent exploration and production activities in the country have led to a dramatic increase in the output of oil. The country currently produces 35 million tonnes of crude oil, two-thirds of which is from offshore areas, and imports another 27 million tonnes. Refinery production in terms of crude throughput of the existing refineries is about 54 million tonnes.
Natural gas production has also increased substantially in recent years, with the country producing over 22,000 million cubic metres. Natural gas is rapidly becoming an important source of energy and feedstock for major industries. By the end of the Eighth Five-Year Plan, production was likely to reach 30 billion cubic metres.
Railways: With a total route length of 63,000 km and a fleet of 7,000 passenger and 4,000 goods trains, the Indian Railways is the second largest network in the world. It carries more than 4,000 million passengers per year and transports over 382 million tonnes of freight every year. It is well equipped to meet its demands for locomotives, coaches and other components. Lately, the Railways have launched a massive gauge-conversion drive as about a third of the track is metre or narrow gauge. With improvement in tracks, plans are afoot to introduce faster trains. Very soon, certain prestigious long-distance trains will be running at 160 km per hour. The Railways have also started a scheme to privatise several services that will include maintenance of railway stations, meals, drinking water and cleaning of trains.
Road Transport: The roadways have grown rapidly in independent India. Ranging from the cross-country link of the national highways to the roads in the deepest interiors, the country has a road network of 2.1 million km. India also manufactures most of its motorised vehicles: cars, jeeps, trucks, vans, buses and a wide range of two-wheelers of various capacities. While Indian scooters have established a good foreign market, the car industry is also looking up with several foreign companies setting up plants in India.
Shipping: The natural advantage of a vast coastline requires India to use sea transport for the bulk of cargo transport. Following the policy of liberalisation, the Indian shipping industry, major ports, as also national highways and water transport have been thrown open to the private sector.
Shipping activity is buoyant and the number of ships registered under the Indian flag has reached 471. The average age of the shipping fleet in India is 13 years, compared to 17 years of the international shipping fleet. India is also among the few countries that offer fair and free competition to all shipping companies for obtaining cargo. There is no cargo reservation policy in India.
Aviation: India has an aviation infrastructure which caters to every aspect of this industry. Hindustan Aeronautics Limited (HAL) is India's gigantic aeronautical organisation and one of the major aerospace complexes in the world.
India's international carrier, Air-India, is well known for its quality service spanning the world. Within the country, five international airports and more than 88 other airports are linked by Indian Airlines. Vayudoot, an intermediate feeder airline, already links more than 80 stations with its fleet of turbo prop aircraft and it plans to build and expand its network to over 140 airports in the far-flung and remote areas of the country. Pawan Hans, a helicopter service, provides services in difficult terrains.
The Government has adopted a liberal civil aviation policy with a view to improving domestic services. Many private airlines are already operating in the country.
Pipelines: Oil and natural gas pipelines form an important transportation network in the country. The country completed recently, on schedule, one of its most ambitious projects, the 1,700 km Hazira-Bijaipur-Jagdishpur pipeline. Costing nearly Rs. 17 billion, the pipeline transports liquid gas from the South Bassein offshore field off Mumbai to Jagdishpur and Aonla, deep in the mainland in Uttar Pradesh. Besides, India has nearly 7,000 km of pipeline mainly for the transportation of crude oil and its products.
Telecommunications: With rapid advances in technology, India now uses digital technology in telecommunications, which derives advantage from its ability to interface with computers. The present strategy focuses on a balanced growth of the network, rapid modernisation, a quantum jump in key technologies, increased productivity, and innovations in organisation and management. Moving towards self-reliance, besides establishing indigenous R&D in digital technology, India has established manufacturing capabilities in both the Government and private sectors.
The private sector is expected to play a major role in the future growth of telephone services in India after the opening of the economy. The recent growth in telecommunications has also been impressive. Till September 1996, the number of telephone connections had reached 126.1 lakh (12.6 million). Soon every village panchayat will have a telephone. By 1997, cellular services in most major urban areas were functional, and telephone connections were available on demand. India is linked to most parts of the world by e-mail and the Internet.
The six core and infrastructure industries, viz., electricity, crude oil, petroleum refinery products, coal, steel and cement, having a weight of 26.7 per cent in overall Index of Industrial Production (IIP) achieved 6.8 per cent during 2000-01. Several fiscal incentives were announced by the government for boosting investment in infrastructure projects. Ten-year tax holiday offered to projects in core sectors like roads, highways, waterways, water supply, sanitation and solid waste management systems can now be availed of during the initial 20 years. Projects in airports, ports, inland ports, industrial parks and generation and distribution of power can now avail of 10-year tax holidays during the initial 15 years. The facility of five-year tax holiday available to the telecommunication sector till 31 March, 2000 was reintroduced for units commencing their operations on or before 31 March, 2003. The concessions were extended to internet service providers and broadband networks. Tax incentives were made available to investors providing long-term finance to enterprises engaged in infrastructure. The Electricity Bill 2001 and the Communication Convergence Bill 2001 were introduced in Parliament.
Power: The generation of power has increased impressively in recent years. In 1990-91, India generated 6.6 billion kilowatt hour of electricity; in 1995-96 the figure was 380.1 billion kilowatt hour. The installed capacity, which was 1400 MW at Independence in 1947, has crossed 83,288 MW. The policy of inviting private sector has been well received; about 140 offers that can generate over 60,000 MW of power have came in.
Coal: Coal is the primary source for power generation in India. The country has huge reserves of coal, approximately 197 billion tonnes. A sufficient amount of lignite (brown coal used in thermal power stations) is also available.
India produced about 270 million tonnes of coal in 1995-96. The government now welcomes private investment in the coal sector, allowing companies to operate captive mines.
Petroleum and Natural Gas: The recent exploration and production activities in the country have led to a dramatic increase in the output of oil. The country currently produces 35 million tonnes of crude oil, two-thirds of which is from offshore areas, and imports another 27 million tonnes. Refinery production in terms of crude throughput of the existing refineries is about 54 million tonnes.
Natural gas production has also increased substantially in recent years, with the country producing over 22,000 million cubic metres. Natural gas is rapidly becoming an important source of energy and feedstock for major industries. By the end of the Eighth Five-Year Plan, production was likely to reach 30 billion cubic metres.
Railways: With a total route length of 63,000 km and a fleet of 7,000 passenger and 4,000 goods trains, the Indian Railways is the second largest network in the world. It carries more than 4,000 million passengers per year and transports over 382 million tonnes of freight every year. It is well equipped to meet its demands for locomotives, coaches and other components. Lately, the Railways have launched a massive gauge-conversion drive as about a third of the track is metre or narrow gauge. With improvement in tracks, plans are afoot to introduce faster trains. Very soon, certain prestigious long-distance trains will be running at 160 km per hour. The Railways have also started a scheme to privatise several services that will include maintenance of railway stations, meals, drinking water and cleaning of trains.
Road Transport: The roadways have grown rapidly in independent India. Ranging from the cross-country link of the national highways to the roads in the deepest interiors, the country has a road network of 2.1 million km. India also manufactures most of its motorised vehicles: cars, jeeps, trucks, vans, buses and a wide range of two-wheelers of various capacities. While Indian scooters have established a good foreign market, the car industry is also looking up with several foreign companies setting up plants in India.
Shipping: The natural advantage of a vast coastline requires India to use sea transport for the bulk of cargo transport. Following the policy of liberalisation, the Indian shipping industry, major ports, as also national highways and water transport have been thrown open to the private sector.
Shipping activity is buoyant and the number of ships registered under the Indian flag has reached 471. The average age of the shipping fleet in India is 13 years, compared to 17 years of the international shipping fleet. India is also among the few countries that offer fair and free competition to all shipping companies for obtaining cargo. There is no cargo reservation policy in India.
Aviation: India has an aviation infrastructure which caters to every aspect of this industry. Hindustan Aeronautics Limited (HAL) is India's gigantic aeronautical organisation and one of the major aerospace complexes in the world.
India's international carrier, Air-India, is well known for its quality service spanning the world. Within the country, five international airports and more than 88 other airports are linked by Indian Airlines. Vayudoot, an intermediate feeder airline, already links more than 80 stations with its fleet of turbo prop aircraft and it plans to build and expand its network to over 140 airports in the far-flung and remote areas of the country. Pawan Hans, a helicopter service, provides services in difficult terrains.
The Government has adopted a liberal civil aviation policy with a view to improving domestic services. Many private airlines are already operating in the country.
Pipelines: Oil and natural gas pipelines form an important transportation network in the country. The country completed recently, on schedule, one of its most ambitious projects, the 1,700 km Hazira-Bijaipur-Jagdishpur pipeline. Costing nearly Rs. 17 billion, the pipeline transports liquid gas from the South Bassein offshore field off Mumbai to Jagdishpur and Aonla, deep in the mainland in Uttar Pradesh. Besides, India has nearly 7,000 km of pipeline mainly for the transportation of crude oil and its products.
Telecommunications: With rapid advances in technology, India now uses digital technology in telecommunications, which derives advantage from its ability to interface with computers. The present strategy focuses on a balanced growth of the network, rapid modernisation, a quantum jump in key technologies, increased productivity, and innovations in organisation and management. Moving towards self-reliance, besides establishing indigenous R&D in digital technology, India has established manufacturing capabilities in both the Government and private sectors.
The private sector is expected to play a major role in the future growth of telephone services in India after the opening of the economy. The recent growth in telecommunications has also been impressive. Till September 1996, the number of telephone connections had reached 126.1 lakh (12.6 million). Soon every village panchayat will have a telephone. By 1997, cellular services in most major urban areas were functional, and telephone connections were available on demand. India is linked to most parts of the world by e-mail and the Internet.
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