Livestock plays an important role in the socio- economic life of India. It is a rich source of high quality foods such as milk, meat and eggs. With a large human population and about 250 million economically strong potential consumers, the domestic demand for these food products are increasing rapidly, the demand often exceeding the supply. After China, India provides a major consumer base for human foods in the world. In India, livestock provides a regular supplementary income and employment not only to millions of producers in the rural areas but also to very large number of people engaged in secondary and tertiary business related to livestock business. It is an important occupation and a source of family income large number of women in the villages. Besides providing organic manure for the soil, livestock is also an important source of several value-added byproducts of animal origin which presently are not properly processed and utilized as a commercial activity but have an immense future business potential.
In last 50 years, India has developed a strong and professionally competent technical, marketing and business manpower in Livestock production and Information Technology. This is an added advantage over many developing countries of Asia and Africa. Availability of competent and comparatively low-cost manpower in India is a great asset which is attracting foreign investors. As a result of stagnancy or in some cases reduction in agricultural production, demand for several inputs like machinery and equipment, feeds, pharmaceuticals etc. has reduced in some countries of America and Europe. It is therefore not surprising that these business enterprises have focussed their attention to emerging Asian markets, particularly India and China. India is in a better position as it has a strong technical manpower base and large number of English speaking population.
Since last several years, India has shown a consistent self -sufficiency in food grain
production. With a steady and sound financial policy, it has maintained a check on inflation and shown good stable economy, as opposed to severe recession seen in 1998-99 in some of the South East Asian countries like Indonesia, Philippines, Thailand etc. With a strong political will supported by good economic policies by the Government, the country is on the path of liberalization in the economy and encouragement for foreign investments particularly in the field of technology upgradation, improvement in quality of products , value addition for increasing exports etc. There is some criticism that the intentions are good but the actions in this directon are slow. But one has to remember that governing a democratic country which has a very large human population, several languages and religions and a large number of political parties with different ideologies is not a small stock. Despite these problems, India has shown remarkable resilience.
The foreign exchange reserves have grown significantly to about 65 billion US$ and soon are likely to touch a figure of 100 US$ billion. For the first time, India is the first developing country that has become a donor amongst the member countries of International Monitoring Fund (IMF). One of the major problems of macroeconomics continues to be poor financial management of some of the state governments and some of the public sector units. However, in the current year, most private sector organisations have shown excellent profitability. A good monsoon this year has further encouraged the industry for fresh investments and growth . There are good signs of improved economy for the near future. The Government of India has set a target of overall annual growth of 6.5 % for year 2003-4. It has shown a strong will for reforms in economic policy including disinvestment in public sector units and is giving encouragement for investment by small domestic investors. Government has announced the policy to encourage Foreign Direct Investments( FDIs), Foreign Institutional Investments (FIIs) as well as Non Resident Indians abroad ( NRIs). With dwindling interest rates in most developed countries, these investments are diverting their funds to the developing economies of Asia, mainly China and India.
Reserve Bank of India has taken strong steps to introduce a policy of lowered interest rates for long term loans, strong discipline in Banks for recovery of outstanding loans and reduction in non performing assets (NPAs). This has shown good results and the financial position of most commercial banks during the current year has improved significantly.
The Security and Exchange Board of India (SEBI) has introduced a strong discipline and has taken several measures to ensure genuine investments and avoid fake transactions in the Indian capital markets. This has already shown good results during this year.
With the introduction of trade liberalization under WTO, India expects to have a better level playing field for increasing exports and its share in world trade. Availability of comparatively cheaper skilled labour, good climatic conditions throughout the year and nearness of India to the emerging markets of Gulf countries and South East Asia, it is considered that India will attract many domestic and foreign investors in near future.
In the decade of 1970, soon after the nationalization of commercial banks, emphasis was given by the Government for increasing the bank's lending in agriculture including allied sectors. A separate apex Financial institution- National Bank for Agriculture and Rural Development ( NABARD) was established for providing refinance on medium/long term loans disbursed by commercial and cooperative banks and Regional rural banks (RRBs) for agricultural farm sector ( including Dairy, poultry and fisheries), non-farm sector activities and short-term production credit for agricultural crops given by cooperative banks and RRBs. It also provides direct finance to state Governments and state sponsored Corporations for infrastructure development projects in areas like minor irrigation, soil conservation, land development etc. The quantum of refinance depends upon the purpose and the type of lending institution ( like commercial or cooperative bank etc). For dairy , poultry etc. it is 90% of bank loan. The rate of interest on refinance varies depending upon the quantum of loan and whether the scheme is in the underdeveloped regions of the country. From 6.75% to 8.5%. Efforts are being made by NABARD to evolve a new approach to disburse the bank credit by linking the Self Help Groups (SHGs) of rural beneficiaries to the credit institutions. It also operates a Research and Development Fund for innovative studies in Agricultural and lending policies. NABARD has taken a role of preparing blockwise and districtwise Potential linked Credit plans (PLP) for India which provides a guideline base for determining ground level credit needs for various agricultural / non farm lending programmes in the country..
NABARD encourages project approach to lending and requires that banks adopt proper methods of appraisal and monitoring of the schemes which includes appraisal for technical feasibility and financial viability . NABARD also performs other tasks such as monitoring and inspection of cooperative banks and RRBs, training of bank staff, district oriented monitoring and evaluation studies, liaison with Government of India for implementation of agricultural lending policy, collaboration with other national and International agricultural funding agencies etc. There are several activities which have been undertaken under a general line of credit and bilateral credit programmes with international funding institutions like World Bank, International Fund for Agricultural Development (IFAD) Swiss Development Corporation (SDC) etc.
The banks are expected to take a margin money varying between 5 to 15% from the borrower and charge annual rate of interest which should be primary lending rate (PLR) fixed by the Reserve Bank Of India (RBI) plus 1%. At current level, it comes to around 12 to 13%. The repayment period for the loan is determined on the basis of financial viability. For dairy, poultry etc, this is between 5 to 7 years.
Some of the highlights of 3 selected livestock sectors namely dairy, poultry and fishery are given below.
