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India’s cotton textile exports grew by 26 per cent at USD 6,235 million in the first six months ended September 2018 and the on-going trade war between US and China will open up new export opportunities, the Cotton Textiles Export Promotion Council (Texprocil) said here.
The country had exported cotton textiles (raw cotton, yarn, fabrics and made-ups) worth USD 4,917 million in April-September 2017-18, the association said in a statement.
However, exports of textiles and clothing declined by 3 per cent with exports of readymade garments registering a steep decline of 16 per cent during H1FY19. India held a special place in global textile trade as the second largest textile exporter in the world. Today, cotton yarn & fabric exports account for over 23 per cent of India’s total textiles and apparel exports.
Ujwal Lahoti, chairman of Texprocil, stated that the ongoing trade war between the US and China would possibly open up new opportunities for cotton textile exports from India and we should be ready to explore them.
The government was also in the process of putting in place alternative schemes to promote exports which would improve competitiveness, he said. Lahoti welcomed the package for the MSME sector announced by the government. Interest subvention on pre-shipment and post-shipment finance for exports by MSMEs has been increased from 3 per cent to 5 per cent.
These measures would provide much needed support and encouragement to the MSME sector, which contributed significantly to the textiles exports. Under the package, GST- registered MSMEs would get 2 per cent interest rebate on incremental loan up to Rs 1 crore, he added.
He also noted that the jump in India’s ranking in the World Bank’s Ease of Doing Business will help boost exports.
Lahoti acknowledged that for textiles exporters, remarkable improvements are visible at the ports, customs and regional offices of DGFT EDI systems.
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As China and the US continue their trade war, what will be the outcome for Africa?
This trade war should not be seen in isolation, and the new year will bring a changed world. China and Russia will cooperate as the new Silk Road begins to join Asia and Europe with a transport and communications corridor Marco Polo could not even imagine.
Russia, Turkey and Iran – once unlikely partners in the Syrian conflict – will form a new Middle East axis to rival that of the US, Israel and Saudi Arabia, with none of the latent instabilities of the latter with its Zionist and Islamic ingredients.
And the US, under Donald Trump, is likely to continue to view Africa – in all but name – as that collection of “shit hole” countries derided by the American president at his undiplomatic, offensive and unthinking worst.
After two years without one, the US will have a permanent assistant secretary of state for Africa – the highest State Department official with an Africa portfolio. Tibor Nagy also comes with a sound reputation as a seasoned diplomat. But will he have any clout on Capitol Hill? And can any official be effective in a State Department that Trump and the former US secretary of state, Rex Tillerson, have slashed and burned?
May’s dancing and used clothes
If the US doesn’t care much for Africa, neither really does the UK. Theresa May’s dismal efforts at dancing on her Africa tour summed up a clumsy view of what the continent needs.
The UK posture is summed up by the position of minister of state for Africa – now held by Harriet Baldwin – with responsibilities in two departments: the Foreign Office and International Development. These are two very different departments and the joint position is both a money-saving device – two ministers for the price of one – and also a confusion of policy as to how the UK should approach Africa. Indeed, perhaps the beleaguered minister’s main responsibility is the search for new UK trading partners in the wake of Brexit.
The US approach to Africa, meanwhile, was summed up in measures launched between May and September 2018: basically, the suspension by the US of trade benefits to Rwanda because of Rwanda’s refusal to import used clothes from the US. In continental terms, the sums are tiny, but the principle enunciated by Rwandan president, Paul Kagame, was stark.
If the volume of used clothes continues or increases, there can be no development of a Rwandan textile industry. In effect, the US is dumping textiles on Rwanda in much the same way as it once dumped grain so cheaply that African farmers could not even begin to compete and agriculture could not develop. For Trump, in his trade wars not just with China but with the world, blue collar manufacturing in his heartland is more important than good relations with anyone.
For a populist president this is dangerous but perhaps understandable. But who has drawn first blood in this US-China standoff? Chinese economic growth has slowed – but only to 6.5% a year, a growth figure for which most other countries would die. The value of the Chinese yuan against the dollar seems destined to fall, but Chinese reserves, divided almost equally between foreign and domestic reserves, of about US$60-$70 trillion, are more than enough to weather the storms to come. Added to what the Chinese did during the US financial crisis of 2007 to 2010 – buying up huge quantities of US toxic debt – China has far more leverage on the US economy than the US has on China’s.
China and Africa
For Africa, it means business with China remains a reality. This relationship has, however, taken on two key new characteristics of late. The first is that China expects its loans to be repaid. Indeed, there is no doubt that a new fiscal propriety is now expected by the Chinese.
The second, very closely connected development – and one which curiously seems not to have been noticed or taken seriously by African leaders – is that increasingly Chinese liquidity is made available not on a state-to-state basis but on a Chinese bank to African state basis.
They may be Chinese state banks – but a bank is a bank, and a bank needs to ensure its loans are repaid and its lending to assets ratio is robust. The use of banks reflects a global Chinese turn to the creation of international and regional banks and funds, most noticeable in Asia-Pacific. The Chinese capitalise these regional funds to the tune of about US$50 billion a time. But this means the beginning of a new Chinese global financial infrastructure that seems deliberately designed to rival the IMF and the World Bank. It’s not just a trade war but a war over who will control the world’s financial flows in the long term.
For Africa, the choice is between growth with borrowed liquidity and growth without – the latter being very difficult. Investment doesn’t come out of nothing, so wise spending of borrowed liquidity is key. It cannot be just for standby budgetary support without product and without exportable value – which is why the Chinese turned down Zimbabwe’sdesperate pleas for exactly that.
An uncertain future
The future will embroil Africa even more in the trade wars to come. What Africa needs to do is to industrialise – to add manufacturing to its raw materials. The long awaited oil refinery in Nigeria is the perfect example. How a significant oil-producing country could spend so many years exporting crude and then reimporting it as a refined product beggars description. The revenue streams would have always been greater if it had been exported refined.
Trouble is, African industry will create jobs in Africa but take away blue collar jobs elsewhere. And the West won’t like that.
But what about China? African governments must navigate the attractions of the quick fix via Chinese loans, and seek the development of long term industrial capacity. Or will the next decade be another of missed opportunities – with trade wars steamrollering an Africa whose response will be to plunge again deeper and deeper into debt?
One of the main objectives of the government to provide incentives for both local and foreign companies is to boost export earnings of the country. Meanwhile the annual total export earning of Ethiopia has declined to $2.857 billion in 2015/16 from $3.152 billion in 2011/12, according to the date from the Ministry of Trade and Industry of Ethiopia.
There could be many reasons for the failure of Ethiopia’s incentives to boost its foreign currency earrings. But in general these figures tell us that the incentives have been misused,” says Melaku Kinfegebriel, Business Consultant at Noble Consulting.
“Either those engaged in the manufacturing sector and got those incentives are not exporting as they promised. They could be focusing in the local market. Or even if they are exporting they are maybe engaged in under-invoicing and contraband border trading, which reduce the amount of foreign currency coming to Ethiopia. Or the companies didn’t go operational at all, which means some were fake established only targeting the incentives. In my opinion, the reasons could be the sum of all these and other factors,” he says. Last Ethiopian calendar which is concluded July 7, 2018, Ethiopia’s government plan was to generate $5.23 billion. Meanwhile the country exported only $2.84 billion worth products. Out of the annual planned earnings, the country’s aim was to generate $998 million from manufactured goods export.
But the achievement for the year (2017/18) was only secured $458.65 million (45%). Some of the major export earing manufactured goods of the country includes, textiles, shoes and leather products, medicines,
Investors engaged or plan to be engaged in the manufacturing sector in Ethiopia have been enjoying incentives from the government. Those incentives include tax free machineries and related capital goods import as well as exemption from export tax when they began producing locally and export. Among others, they have also been enjoying 70% now increased to 85% banks loan from state banks without collateral.
“Though there are benefits in terms of job creating from those who are genuinely investing using the incentives such as job creation, providing $3.7 billion duty free per within one year for an industry that generates less than 345 million is not acceptable by any standard,” Melaku says.
Around 80% of Ethiopia’s export commodities are still raw agricultural products and minerals. The raw products Ethiopia export ranges from tomatoes, fruits, garlic, milk, tea and coffee to live animals, equilaptus, wax and oil seeds, as well as several types of cereals and spices. The country has also been exporting raw minerals such as tantalum, gemstones and emerald, among others.
Though power outage is still a problem in the country including the capital Addis Ababa, Electricity is also the new export generating product of Ethiopia. Gas, which the country started production at small scale in Ogaden area Eastern part of Ethiopia in of Somali region is also expected to generate additional hard currency for the country.
Of the total $2.84 billion the country earned from export in 2017/18 fiscal year, 238,466 tons of coffee has generated $838.15 million.
The ministry of trade in its report stated that the decline of the price of coffee in the international market has reduced the income from coffee export. The report has also stated that the other reason for the decline of income from coffee export is because the regulators have failed to take punitive measures (beyond warning) against those who sell coffee for less than the global price.
During the same period, oil seeds, spices and Khat (addictive stimulant plant) have respectively generated $418.4 million, $268.12 million
Reports show that dependence on raw agricultural products, minerals and other primary goods export is making African countries vulnerable to global commodity price fluctuations. Experts’ advice these countries to focus on value addition to their raw commodities, which will enable the countries to create more jobs at home and increase their export revenues.
In addition, others also suggest for the need of a dedicated export promotion agency and a strong well integrated regulatory agency that helps to boost export performance of these countries based on research as well as deal with issue such as under-invoicing and following on fake investors engaged in money laundering and contraband trade, among others.
China and the United States are locked in a trade war, but you wouldn’t know it from looking at Chinese exports.
They leaped almost 16% in October compared with the same month a year earlier. That was significantly higher than analysts had forecast and even stronger than last month’s growth.
The performance is surprising because October was the first full month during which new US tariffs on $200 billion of Chinese goods were in effect. Economists and Chinese government officials said recently that they expected export growth to slow in the final months of the year.
One reason for the surge is companies are eager to avoid even higher duties in a few months’ time: The US tariffs on $200 billion of Chinese goods that kicked in on September 24 are set to rise from 10% to 25% at the end of the year.
This “encourages exporters to rush through orders to the United States,” Louis Kuijs, head of Asia economics at research firm Oxford Economics, wrote in a client note Thursday. But he added that it’s “obviously not the whole story.”
The downward slide in China’s currency is also playing a role. The yuan has slumped almost 10% against the dollar since February as investors have become more concerned about the health of China’s economy and the potential impact of the escalating trade war.
A weaker currency makes Chinese goods more competitive compared with those of rival exporters and offsets some of the impact of the US tariffs.
China was also helped in October by strong exports to big markets such as the European Union and Japan.
“Global demand may be holding up better than feared,” Kuijs said.
Economists are still predicting that the good times for China’s huge export industry won’t last.
Investment bank ANZ said Thursday that it expects the real difficulties to start after the US tariffs on the $200 billion of Chinese goods rise to 25% at the end of the year.
US President Donald Trump has said he’s prepared to expand the tariffs to effectively cover all Chinese exports to the United States, which topped $500 billion last year.
Trump is due to discuss trade with Chinese President Xi Jinping on the sidelines of the G20 summit in Buenos Aires later this month, but experts are doubtful the two leaders will be able to agree on a swift resolution to the conflict.
Half of Japanese companies expect new trade talks with Washington to boost their U.S.-bound exports, a Reuters poll found, despite President Donald Trump’s intensifying drive to cut the trade gap between the two major economies. There are, however, concerns among more than half of the respondents that the talks, which Japan and the United States agreed to in September, will lead to higher U.S. tariffs and other restrictions on Japanese exports, the monthly poll showed.
Since taking office nearly two years ago, Trump has repeatedly blasted trading partners Japan and China for running big trade surpluses with his country.
After the U.S. midterm elections this week, Trump said trade was one area in which he hoped to work with Democrats, who won control of the House of Representatives. Trump also criticized Japan for not treating the United States fairly on trade.
“They send in millions of cars at a very low tax. They don’t take our cars,” he said Wednesday.
U.S. Trade Representative Robert Lighthizer has called for greater access for American beef and rice and targeted what he calls non-tariff barriers to the Japanese car market.
Despite the trade hostility, Japanese companies seem confident that Tokyo will resist U.S. pressure, the Oct. 24-Nov. 5 survey showed.
“Japan must firmly resist unfair demands from the U.S.,” a manager of an electric machinery maker wrote.
“We hope the trade talks will result in a way that serves the best interests of Japan,” wrote a manager of a transport equipment maker.
When asked to pick the expected outcome from the trade talks, 50 percent of companies polled chose “an expansion of exports.” Just 19 percent believe Japan will open up its domestic farm market, where products like rice and beef are protected by high tariffs, or remove supposed barriers to the car market, the survey showed.
Japanese authorities argue the country’s car market faces no barriers and that U.S. companies have done poorly in Japan because they haven’t invested in the market.
Asked about their biggest concern regarding the talks, 53 percent said they feared the United States would impose import restrictions or higher tariffs on Japanese products.
Twenty-two percent said they worry about the adoption of currency provisions in any trade pact and how that could impact monetary policy. Underlying such concerns are fears that Washington might link trade with foreign exchange policy and monetary easing and accuse Japan of keeping the yen artificially weak.
In January 2017, Trump alleged that Japan used its “money supply” to weaken the yen and give exporters an unfair trade advantage. Such criticism could create currency diplomacy problems for Tokyo if it responds to a spike in the yen with a devaluation.
“We’re watching what the two countries may settle for if currency provisions are introduced, and how that would affect the currency and stock markets,” a manager of a manufacturer wrote.
Companies responded anonymously to the survey, conducted for Reuters by Nikkei Research. It polled 482 large and mid-sized non-financial firms, about 240 of which responded to the questions about trade.
U.S.-CHINA FRICTION
Japanese businesses are pessimistic about the outlook for the U.S.-Sino trade war, which they worry will indirectly hurt export-reliant Japan, the survey showed.
Japan’s role in the global supply chain makes it vulnerable to a decline in Chinese exports to the United States. Chinese manufacturers use parts and equipment from Japan, and Japanese companies also have factories in China that export to America
Already, the U.S.-China trade friction is prompting companies such as Yaskawa Electric Corp (6506.T), Fanuc Corp (6954.T) and Canon Inc (7751.T) to issue conservative earnings forecasts, reflecting their customers’ cautious stance on capital expenditure plans.
Washington and Beijing have imposed tit-for-tat duties on each other’s goods over recent months, with neither side backing down from an increasingly bitter trade dispute that has jolted financial markets and cast a pall over the global economy.
In the survey, about three quarters of Japanese firms expect the U.S.-China trade war to last until end-2019 or beyond, with a majority anticipating the trade dispute to become worse over the next one to two years.
“The impact won’t be limited to the two countries,” a manager of a construction company wrote in the survey. “They must become conscious as world leaders and mend their ways by taking account of harmful effects from prioritizing their own country.”
Arrivals at markets up as prices rise
As prevailing weather conditions and water scarcity hit cotton yields in key growing regions, trade body Cotton Association of India (CAI) has further trimmed its crop estimate to 343.25 lakh bales (each of 170 kg) for the season 2018-19 beginning from October 1.
Earlier CAI, at the Cotton India 2018 meet in Aurangabad last month, had projected the crop size at 348 lakh bales for the year 2018-19, 365 lakh bales lower than 2017-18.
CAI cited water shortage and climatic adversities as factors affecting the crop in the key growing regions of Gujarat, Maharashtra and Karnataka. “The CAI has revised downwards the crop estimate for Gujarat by 2 lakh bales, Maharashtra by 1 lakh bales, Karnataka by 1 lakh bales and Orissa by 75 thousand bales than compared to its previous estimate due to unfavourable weather conditions,” the trade body said in a statement.
The CAI has projected total cotton supply during October 2018 at 50.13 lakh bales, which consists of the arrival of 26.13 lakh bales in October 2018, imports in October 2018, which the Committee has estimated at 1 lakh bales and the opening stock at the beginning of the season as on October 1, which the Committee has estimated at 23 lakh bales.
Arrivals mount
On the arrivals front, record-breaking cotton arrivals were registered in October, mainly due to the absence of rain during the last 60 to 70 days in the entire cotton belt of India.
“Due to the dry and hot weather, kapas bolls opened in early stages this year. Farmers are getting a higher price for their crop at ?5,300 per quintal as against ?4,500reported around same time last year. Due to this, arrivals are considerably higher in October this year,” CAI stated in its statement.
CAI has estimated cotton consumption during October 2018 at 27 lakh bales, while the export shipment of cotton in October 2018 has been estimated at 2.50 lakh bales.
The stock at the end of October 2018 is estimated at 20.63 lakh bales, including 16.53 lakh bales with textile mills, while the remaining 4.10 lakh bales are estimated to be held by CCI and others (MNCs, traders, ginners, etc).
CAI has estimated domestic consumption for the season at 324 lakh bales, while the exports are estimated to be 51 lakh bales, 18 lakh bales lower compared to the 69 lakh bales last year.
The carry-over stock at the end of the 2018-19 season is estimated by CAI at 15.25 lakh bales.
The port will provide India connectivity to enhance trade with land-locked Afghanistan and Central Asia
Decks have been cleared for India to start operating the Chabahar port in Iran by the end of November after the US granted exemptions to the port from the sanctions it had imposed on the Persian Gulf nation from Sunday.
“We are targeting to start operations at Chabahar by the end of the month,” a Shipping Ministry official said, ending months of uncertainty over the fate of the India-funded project.
The waiver has also re-opened the possibility of paying Iran in Euros, said the official, who declined to be named.
Temporary arrangement
India has picked Bandar Abbas-based Kaveh Port and Marine Services company to run the port on a temporary arrangement for 18 months till a full-time manage, operate and maintain (MOM) contractor is finalised by India Ports Global Pvt Ltd, the Indian state-owned entity that is implementing the project.
The start of commercial operations at Chabahar has been delayed because of difficulties in paying Kaveh Port and Marine for the services due to banking issues on transfer of funds.
“To overcome this hurdle, Iran had agreed to accept payment in rupees. But, with this changed scenario, whether they will insist on taking payment in Euros, we’ll have to see and discuss that with Iran and sort it out. Making payment in Euros should not be a problem now since Chabahar has been exempted from the sanctions; so banking transactions should not be an issue,” the official said.
“The waiver granted by the US will allow us to ask Kaveh to start operations; this is the first step,” the official said.
The fine print of the US waiver terms will also help India decide whether to dilute the tender conditions for selecting a full-time Indian MOM contractor to run Chabahar.
India Ports Global (a 60:40 joint venture between Jawaharlal Port Trust and Deendayal Port Trust) and Aria Banader Iranian Port signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease. Cargo revenues collected will be shared by India and Iran as per an agreed formula.
Located in the Sistan-Baluchistan Province on Iran’s South-eastern coast (outside Persian Gulf), Chabahar port is of great strategic importance for development of regional maritime transit traffic to Afghanistan and Central Asia.
The first phase development of Chabahar port will have a container terminal with two berths of 640-metre quay length and a depth of 16 metres and a multi-purpose terminal with a quay length of 600 metres and draft of 14 metres. The port has a total back-up area of 70 hectares.
India Ports Global has ordered four rail-mounted quay cranes (RMQCs) for a combined $29.8 million from Chinese port crane maker Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC) and 14 rubber-tyred gantry cranes or RTGCs for about $18 million from Finnish crane maker Cargotec OYJ for erecting at Chabahar port.
Advantage India
Chabahar will provide India the much-denied connectivity to enhance trade with land locked Afghanistan and Central Asian nations.
India’s participation in the development of Chabahar Port will provide India an alternative and reliable access route into Afghanistan utilising India’s earlier investment in Zaranj-Delaram road built in Afghanistan, and also a reliable and more direct sea-road access route into Central Asian Region.
Chabahar Port has the potential to become a regional transit hub for Afghanistan and eastern Central Asian Countries. It is expected that volume of trade will increase substantially on the commencement of operation at Chabahar Port, the Ministry official said.
It will improve bilateral trade with Iran — currently pegged at $16 billion — and provide an opportunity to Indians to avail low-cost energy for various industries in the free trade zone in Chabahar.
After the stand-off between the government and the RBI came out in the open, the Reserve Bank’s central board members are believed to be making efforts to find a middle ground on a host of issues – including those related to tapping the central bank’s reserves, relaxing the prompt corrective action (PCA) framework imposed on public sector banks, providing a separate liquidity window to non-banking finance companies, and autonomy – before its crucial upcoming meeting on November 19. Key central board members, especially Finance Ministry representatives and RBI’s top-brass, have reportedly initiated parleys, apparently at the behest of the Finance Minister and the PM’s Office in the run-up to the meeting.
“Earlier, differences between the government and the RBI used to be resolved behind closed doors. But now this public spat has created an extraordinary situation. This is not good for the economy. A dialogue, rather than public posturing, is the need of the hour,” said a top banker.
Surplus transfer
According to reports, the government is seeking a surplus transfer of more than a third of the RBI’s ?9.60-lakh crore worth of reserves to be utilised to recapitalise public-sector banks. This capital could help most of these banks come out of the PCA framework and start lending.
Citing the example of Argentina, Viral Acharya, Deputy Governor, has warned that the transfer of excess reserves from the central bank to the government could prove to be catastrophic. Governments that do not respect the central bank’s independence will sooner or later incur the wrath of financial markets, ignite economic fire, and come to rue the day they undermined an important regulatory institution, cautioned Acharya in a recent speech. In a snide allusion to Acharya’s remark, Economic Affairs Secretary Subhash Chandra Garg tweeted on November 2: “Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4 per cent during the week, and bond yields below 7.8 per cent. Wrath of the markets?”
NS Vishwanathan, Deputy Governor, in a recent speech, warned that any relaxation of prudential capital norms for public-sector banks could result in a reset of their credibility/standing in international markets.
The NBFC sector wants a separate liquidity window opened by the RBI on the lines of what was done in the US, where a troubled asset relief programme (TARP) was unveiled in 2008 for buying illquid securities.
The Reserve Bank has liberalised the norms governing foreign borrowings for infrastructure creation “in consultation with the Government”.
The minimum average maturity requirement for ECBs (external commercial borrowings) in the infrastructure space raised by eligible borrowers has been reduced to three years from earlier five years, a notification said.
Additionally, the average maturity requirement for mandatory hedging has been reduced to five years from earlier ten years, the central bank announced.
The provisions have been reviewed and decisions taken “in consultation with the Government of India,” it added.
The move comes amid concerns surrounding the availability of funds following a liquidity squeeze and the difficulties being faced by non-bank lenders, especially those facing asset liability issues due to heavy reliance on short term funding for long term assets.
This, along with defaults by infra lender IL&FS, has hurt the credit markets.
The Government has been unequivocal in suggesting remedial measures which will address the needs of the economy.
Some measures reportedly suggested by the Government include a special window for NBFCs, and the RBI does not seem to be amenable for undertaking the measures.
The relaxations in the ECB norms follow other moves by the RBI, including last week’s permission to banks to use credit enhancement to help NBFCs raise medium to long term funds.
An analysis of price data also showed that the average rates of seven crops including jowar, bajra, maize, urad and moong were 10-41% below MSPs in October.
Prices of 12 among the 14 kharif crops have ruled below their minimum support prices (MSPs) since arrival of the summer crop began more than a month ago, and in case of five of these crops namely paddy, tur, groundnut, niger and ragi, the prices have been on a continuous decline through the season.
While the 12 crops’ prices in key mandis in October were on an average 8-40% lower than the respective MSPs, the five crops are now being sold 5-9% lower than in the first week of last month. Only cotton and sesamum are costlier to wholesalers than their MSPs
Despite a 4-52% rise in MSPs for this kharif and the PM-AASHA, a stronger price support scheme, farmers are still being denied remunerative prices for their produce. The procurement mechanism is yet to be up and running in most states.
The average mandi price of common variety of paddy, for instance, is about Rs 1,536/quintal now against Rs 1,612 in the first week of October in Burdwan, West Bengal, India’s largest rice producer. Groundnut prices have also declined to Rs 4,425/quintal as on October 31 from Rs 4,650 on October 1 in Deesa mandi of Banaskanth, Gujarat, according to agmarknet portal. The average mandi prices of the 5 crops mentioned above were 8-35% below their respective MSPs last month.
An analysis of price data also showed that the average rates of seven crops including jowar, bajra, maize, urad and moong were 10-41% below MSPs in October.
However, the mandi prices of these seven crops are now higher compared with the rates in the first week of October, but still below the MSPs.
Among the crops which averaged below their MSPs during the period under review, tur prices were down 34%, groundnut 8%, ragi 23% and niger 35%. Rolling out a package of price deficiency support schemes for agricultural crops, the government had announced an extra Budget outlay of over Rs 15,000 crore for procurement of non-National Food Security Act (NFSA) crops during the June 2018-July 2019 crop year. It also enhanced the government guarantee for Nafed to undertake procurement of pulses and oilseeds by Rs 16,550 crore to Rs 45,450 crore for this fiscal. If the policy of assured price support is to be implemented throughout the country and for all 23 identified crops, then the cost could indeed turn out to be far higher.
