Economy
Indian kitchens demand oil; production declines, imports soar
Pushed by the rising use of oil as a medium for cooking in rural areas and the falling production of oilseeds, India’s edible oil imports more than doubled in the decade to 2015, according to ministry of consumer affairs data.
 
Consumption in rural households rose 40% and urban 29% between 2004 and 2012, and oilseed production declined seven per cent between 2005 and 2012, according to a August 2015 report from the ministry’s department of food and public distribution.
 
Indian use of edible oil has varied based on prices and availability, but demand appears uninterrupted, a likely consequence or rising population and growing prosperity.
 
“Growth has also been driven by government policies relating to oilseeds production, domestic processing and imports, all of which have affected the edible oil price and demand in the country,” said a May 2016 report by management consultancy ICRA.
 
“With India’s population increasing from 541 million in 1971 to 1.02 billion in 2001, and to 1.28 billion at present; and per capita income growth rising throughout the last three decades, consumption growth in India has been almost uninterrupted till recently. Consumption growth has been variable in recent years, primarily because of sharply higher product prices,” the report added.
 
Indian oilseed production cannot cope.
 
Edible oil is produced from oilseeds, and the department of food and public distribution report suggests that their production fell by a million tonnes over a decade ending 2015.
 
Some reasons proffered for stagnant production of oilseeds:
 
* Erratic rainfall is the main reason, according to the government
 
* Farmers are losing interest in oilseeds; yield not worth the cost
 
* Farms producing oilseeds have moved to rice and wheat, according to November 2014 report from the Indian Institute of Management-Ahmedabad.
 
As demand rises, imports are taxed to protect domestic manufacturers
 
The government hiked import duties on edible oils to protect the domestic industry, the Times of India reported in September 2015, from 7.5% to 12.5% on crude edible oil and from 15% to 20% in 2014-2015 on refined oil.
 
Imports now account for two-thirds of the India’s edible oil demand, which is unlikely to reduce as the population grows and incomes continue to increase. The consumer is likely to pay for taxes imposed on imports.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

HAL must be modernised, if Tejas are to be saved
If the recent induction of the indigenous Tejas Light Combat Aircraft (LCA) has received a muted welcome from the IAF, there are very good reasons for it. While the nation and the defence-industrial complex may celebrate a milestone in military indigenisation, the service, charged with the defence of our skies, has much more to worry about.
 
With obsolescence eroding its aircraft strength and the Rafale deal in limbo, there seem to be no inductions from abroad on the horizon; other than a few more Sukhoi SU-30s to attain the target strength of 272 heavy fighters. The IAF, while still seeking a medium fighter, may have to make do with the Tejas (and its future derivatives) -- in terms of numbers as well as capability - till something else turns up.
 
Since much of the IAF's combat fleet is assembled, overhauled and supported in-country, this would make the service totally dependent on India's monolithic aerospace giant: Hindustan Aeronautics Ltd (HAL). This is a thought that would strike dread in the heart of any air warrior. Having flown many HAL products and been associated with its aircraft and helicopter projects, I can put my fingers on (at least) four good reasons for the IAF's leadership to be apprehensive in this regard. Most of them are attributable to HAL's public-sector work-ethos, nurtured by a protective Department of Defence Production.
 
Firstly, the lackadaisical approach of HAL's unionised employees that engenders low productivity. Secondly, poor production-engineering standards that create maintenance and inter-changeability problems on aircraft. Thirdly, the high failure rate of HAL manufactured components and systems with attendant safety implications. Lastly, sub-optimal product-support that frequently leaves HAL customers high and dry -- without any options.
 
Given the acceptance of Tejas by the IAF -- whether voluntarily or under duress -- this aircraft now assumes a key role in India's national security matrix. It must, therefore, not only be inducted in sufficient numbers in a compressed time-frame but also be accorded Final Operational Clearance at the earliest, to enable combat exploitation over its full envelope.
 
Concurrently, improvements, upgrades and modifications have to be wrought in the Tejas to enhance its capabilities. Given low production rates and the other attributes of HAL, mentioned above, all this is unlikely to happen unless the Ministry of Defence (MoD) thinks out of the box, adopts an innovative approach and acts with alacrity.
 
Going by past precedent, it would be unrealistic to expect the MoD to undergo an overnight transformation in outlook and it would, therefore, have to be the end-users who must provide the initial impetus and sustain momentum of desired changes. At this juncture, a digression is necessary to highlight the Indian Navy's interest in the LCA and to illustrate the critical importance of customer involvement in project management.
 
Unbeknownst to many, the Indian Navy, in keeping with its commitment to indigenisation, has been a steadfast supporter of the LCA for decades. In its quest for a ship-borne version of the aircraft, the navy commenced discussions with the LCA's designer, the Aeronautical Development Agency (ADA), in the early 1990s.
 
Initial feasibility of a naval version having been established, an engineering development programme was commissioned to seek thrust-enhancement, fitment of an arrester hook and extensive re-design of the undercarriage and fuselage for carrier operations.
 
Having drawn up Qualitative Requirements for the aircraft, the navy also contributed Rs 400 crore ($60 million) to the LCA (Navy) project, becoming the only potential customer to have done so. The level of the navy's commitment can be gauged from the fact that a naval test pilot deputed to the National Flight Test Centre rose to become its head, and the current ADA Director is a naval aeronautical engineer who was originally sent to oversee the LCA (Navy) a decade ago.
 
The prototype LCA (Navy) was rolled out in July 2010, and has been undergoing trials on a specially constructed carrier simulation facility at the naval air station in Goa. With three aircraft-carriers projected in its plans, the navy would need 100-150 ship-borne fighters in the next two decades.
 
While the LCA (Navy) -- if successful -- would make up some of these numbers, the navy (like the IAF) would also need a medium fighter to equip its carriers, but one which is carrier-compatible for catapult-launch and arrester-hook recovery. Currently there happen to be three such examples in the market -- the US F/A-18 Hornet and F-35C Lightning II and the French Rafale.
 
Against the backdrop, of the latest dispensation permitting 100 per cent FDI in defence production, coupled with Prime Minister Narendra Modi's passionate advocacy of Make in India and Make for India, the IAF and the navy need to make common cause and capitalise on new windows of opportunity. Given the historical inability of our public sector to reform itself, the two services should urge the government to form multiple public-private joint ventures (JV) involving ADA, divisions of HAL, the Indian private sector and foreign aerospace companies.
 
These initiatives, which will not only transform India's aerospace industry but also bolster national security, must include joint ventures for: (a) the modernisation and streamlining of HAL's existing production facilities; (b) creation of additional assembly lines to boost LCA production rate; (c) exploring, with ADA, upgradation of the LCA and design of LCA Mark II; and (d) setting up a new aero-engine production plant for the LCA.
 
Should the IAF and the navy be able to agree upon a common medium fighter, they would have a powerful lever to persuade the government to set up another JV for its collaborative production in India.
 
Any move to loosen the deadly grip of the PSUs and allow private sector participation in defence will see the dinosaurs of the Left (embedded in all political parties) as well as the status quoist Department of Defence Production up in arms against it. This is where the Service Chiefs and the techno-savvy Defence Minister could take a common stand and pull together -- in the interest of national security.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

Chandan Sreedhar

1 year ago

It is a pity that our rulers are blind to the hard facts about Security of the Nation. Now we have a reasonably responsive set of Politicians at the helm of affairs, contents of this article by a retired Admiral should should make some sense to them. We do not have a strong lobby populated by retired Service Officers who are heard by the decision making bodies in the Defense Ministry . Such a body need be funded by Private Sector engaged/interested in leading Design & Manufacture of Military warlike machines and equipment including War Planes, Tanks and Guns etc. HAL is a tired old man require respectable rehabilitation by infusing new source of knowledge/energy and experience of the state of the art technology.

Jyoti Dua

1 year ago

A good analysis by Admiral Arun Prakash. He has spelled the recommendations too. As a layman, I found it very informative. Let us hope Service Chief and our noble Defence Minister take not of it. Outstanding recommendations.

Panel to study options for new financial year
New Delhi: The Union government on Wednesday set up a four-member committee to examine the desirability and feasibility of having a new financial or fiscal year, an official statement said.
 
"The committee, headed by former Chief Economic Adviser Shankar Acharya, will examine the merits and demerits of various dates for commencing the financial year, including the existing April 1 to March 31," the statement said.
 
The other three members of the committee are former Cabinet Secretary K.M. Chandrasekhar, former Tamil Nadu Finance Secretary P.V. Rajaraman and Centre for Policy Research senior fellow Rajiv Kumar.
 
The committee has been asked to submit its report by December 31.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine)