The potential in employment-intensive sectors of food & wood
The Government has rightly identified the need to promote sectors with high employment intensity. It would be important here to highlight the potential in two specific sectors relating to the rural economy, namely food processing and agro-forestry where supportive policies can significantly contribute to job creation, enhance rural incomes, help manage food inflation and promote sustainable agriculture.
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Today, only 10% of India’s agri-produce, including milk, is processed. This is as low as 2% for fruits and vegetables, compared to over 70% in the Philippines, Brazil and Malaysia. Colossal agri-wastage not only poses a constraint on farmer income, but also fuels supply-side shortages, leading to food inflation. A big push to India’s food processing sector, which lies at the intersection of agriculture and industry, will be a force multiplier in creating large-scale employment, enhancing farm incomes and combating agri-wastages. Unfortunately, even though India produces enough food, high prices of processed food restrict demand and are a key constraint to the growth of this sector. This is primarily due to the cascading effect of taxation along the value chain. Consequently, there is lower demand for processed food leading to low investments in this very important sector. A paradigm change can take place if demand for processed food products is substantially increased by lowering prices through a zero-tax regime on this industry. This will help in paring down prices, enhancing demand, thereby making it attractive for investment and increasing employment opportunities across the value-chain.
Apart from food processing, another rural-based segment where immense potential exists, is the relatively untapped agro-forestry sector that can effectively address the traditional conflict over land-use for food, fuel, fodder, fibre and forests. By synergising tree-growing with crop production, both food and wood security can be ensured, thereby contributing to the conservation of precious natural resources. Farmers can get multiple benefits by using their scarce land resources to maximize returns through both agriculture and tree-planting, thus considerably enhancing their incomes.
India has significant imports of wood and wood-based products such as furniture, construction timber, pulp and paper, packaging, plywood and so on. Many of these imports attract duties as low as nil to 5%. The tariff policy, as it stands today, makes import of wood more attractive than growing trees in India. This prevents livelihood creation in the country and “exports” jobs to countries that grow trees and sell wood-based products. Conducive policies ought to be crafted to boost India’s natural advantage in agro-forestry and promote employment-generating wood-based industries. Agroforestry is also an important source of carbon-neutral biomass energy which can substantially reduce dependence on fossil fuels. It would be worthwhile to mention that ITC’s Afforestation Programme, that today covers 5,00,000 acres of plantations by tribals and poor farmers, have so far generated over 100 million-person days of employment besides creating a massive green cover to combat climate change. It also provides fibre for several paper and pulp industry players through renewable forestry, saving foreign exchange, retaining value in the country and creating jobs.
Responsible competitiveness for sustainable and inclusive growth
Rapid growth by itself may not ensure social equity or the generation of large-scale sustainable livelihoods. A new paradigm is called for today to spur extreme competitiveness of the economy, whilst ensuring that the environment is nourished and large-scale sustainable livelihoods are created – an approach I call “Responsible Competitiveness”. Making societal value creation a core purpose of business spurs innovation that can contribute substantially to enriching economic, environmental and social capital. ITC’s two-decade journey towards being a global sustainability exemplar reinforces this belief. A focus on responsible competitiveness, inspired by ITC’s vision to serve larger national priorities, is not only evident today in the range, scale and scope of its businesses but also in the creation of 6 million livelihoods whilst being the only company in the world to be carbon, water and solid-waste recycling positive. It is heartening that progressive companies are today increasingly embracing a strategy of sustainable and inclusive growth. This indeed augurs well for the future.
We stand today at a moment in history when India is redefining its future with self-confidence in its capabilities and potential. I am convinced that a mission and patriotic fervor to create, nurture and support globally competitive Indian enterprises who are passionately driven by the vision to subserve larger national priorities can transform the country’s future. It is time that the collective energies of the nation are harnessed to build such world-class Indian enterprises of tomorrow. It is then that India’s growth story will create much more value in the economy and also ensure growth with equity and employment. In that lies the hope for millions of Indian youth, and their collective dreams and aspirations for a better future.
Y C Deveshwar, Chairman, ITC Limited writes this piece for FICCI publication “Economy of Jobs”.