INTRODUCTION TO ENTREPRENEURSHIP

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Cabinet approves 51% FDI in multi-brand retail

Indian retailers finally get a chance to rejoice as the Cabinet today cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand.
Commerce and industry minister Anand Sharma said that he would give a statement in Parliament on retail FDI.
Currently, India allows 51% FDI in single brand retail and 100% FDI in cash and carry format of the business.
The decision will be cheered by global retail giants such as Wal-Mart that have long been eyeing India's lucrative retail sector which is mainly populated by small ‘mom & pop’ shops. Currently, organized retail, or large chains, makes up less than 10% of the market.
An ASSOCHAM report states that India’s overall retail sector is expected to rise to USD 833 billion by 2013 and to USD 1.3 trillion by 2018, at a compounded annual growth rate of 10% driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at nearly 2% a year.
The recommendation to increase FDI in retail was made by Cabinet Secretary Ajit Kumar Seth, however it came with certain riders like 50% of the investment and jobs should go to the rural areas, 30% of the inputs should be sourced from medium and small enterprises and investment in infrastructure.
However, such entities would be allowed only in towns with population of over 10 lakh.
Commenting on the development, president of the Confederation of Indian Industry, B Muthuraman, says “CII strongly supports the introduction of FDI in multi-brand retail recognizing that it would benefit the consumers, producers (farmers) and small and medium enterprises (SMEs) and generate significant employment.”
Chandrajit Banerjee, director general of the CII goes on to say that “this move is expected to substantially benefit consumers also; by making available farm produce at much lower prices.”
Even though everyone is celebrating this decision, Raj Jain, chief executive of Bharti Walmart, warns that India may not see a flood of investments immediately. “There should be substantial investment in the next two-three years,” he told CNBC-TV18.
However, Jain is a little put-off by the condition to invest in towns with a population of more than 10 lakhs. “Only 51 towns in the country meet this requirement, so a large group of people will not get this service,” he said.

 

Food inflation fell sharply to single digit at 9.01% for the week ended November 12 even as prices of most agricultural items, barring potatoes, onions and wheat, continued to rise, on an annual basis.

Food inflation, as measured by the Wholesale Price Index (WPI), was 10.63% in the previous week.

The rate of price rise in food items stood at 11.38% in the corresponding week of the previous year.

According to the data released by the government today, onions became cheaper by 32.85% year-on-year, while potato prices were down by 7.23. Price of wheat also fell by 3.09%.

However, all other food items became expensive on an annual basis during the week under review.

Vegetables became 17.66% costlier, while pulses grew dearer by 14.28%, milk by 10.46% and eggs, meat and fish by 11.98%.

Fruits also became 4.59% more expensive on an annual basis, while cereal prices were up 2.86%.

Inflation in the overall primary articles category stood at 9.08% during the week ended November 12, as against 10.39% in the previous week. Primary articles have over 20% weight in the wholesale price index.

Inflation in non-food articles, including fibres, oilseeds and minerals, was recorded at 4.05% during the week under review, as against 5.33% in the week ended November 5.

Fuel and power inflation stood at 15.49% during the week ended November 12, the same as in the previous week.

Bio-diesel Fuel Through Jatropha Seeds

 JATROPHA 


Jatropha curcas (Kattamanakku) is an oil plant. The botanic name Jatropha is derived from Greek, "Jatras" meaning Doctor and "trophe," Nutrition.

Jatropha curcus is a drought-resistant perennial, growing well in marginal/poor soil. It is easy to establish, grows relatively quickly and lives, producing seeds for 50 years.
Jatropha the wonder plant produces seeds with an oil content of 30%-40%. The oil can be combusted as fuel without being refined. It burns with clear smoke-free flame, tested successfully as fuel for simple diesel engine. The by-products are press cake a good organic fertilizer, oil contains also insecticide.
It is found to be growing in many parts of the country, rugged in nature and can survive with minimum inputs and easy to propagate.

Jatropha Seeds

Jatropha Curcas is an inedible energy oil crop that is used as a feedstock in the production of sustainable biodiesel. Jatropha Curcas can be grown in arid and marginal land requiring very little water.

Jatropha Curcas is therefore a high quality feedstock suitable for biodiesel that is;

• Low in cost

• Sustainable and in line with the group's sustainability commitments and values

• Will not compete with global food supply as the Jatropha plant is an inedible crop

• High in oil content and low in free fatty acid content

• High in energy balance with greater carbon savings

• A source of income and livelihood for the rural farmers in India with marginal and arid land.
• Jatropha is adapted to a wide range of climates and soils.

•  It can grow almost on any type of soil whether gravelly, sandy or saline and thrives even on the poorest stony soils and rock crevices.
•  It is a drought resistant perennial living up to 50 years.

The tree grows up to a height of 3 meters, which means harvesting is an easy task. A hybrid variety of jatropha could give three harvests an year, compared to two harvests by other varieties of jatropha. It takes two years for a 'Jatropha' sapling to begin producing seeds, and they can produce seeds for up to 30 years. The seeds are crushed to extract raw oil, Jatropha seeds contain about 35% of non-edible oil.

Sustainability

Jatropha is a valuable multi-purpose crop to alleviate soil degradation, desertification and deforestation, which can be used for bio-energy to replace petro-diesel, for soap production and climatic protection, and hence deserves specific attention.

Jatropha can help to increase rural incomes, self-sustainability and alleviate poverty for women, elderly, children and men, tribal communities, small farmers. It can as well help to increase income from plantations and agro-industries.

There are various trees that are suitable for bio-diesel production. Out of all these trees, Jatropha must be regarded as a sure inclusion and the foundation around which a plan can be built if for nothing but its pure hardiness and stress handling ability. It is just a tree that has enough credentials. That is why the Planning Commission of India has nominated it as ideal plant for bio-diesel.

Food VS Fuel

Rushing to turn food crops — maize, wheat, sugar, palm oil — into fuel for cars, without first examining the impact on global hunger, would be a recipe for disaster. Among the potential impacts identified are increasing food prices, increasing competition over land and forests, forced evictions, impacts on employment and conditions of work, and increasing prices and scarcity of water. That is why Jatropha was recently recommended as a biofuels crop for developing countries by UN Special Rapporteur on the right to food

In recent years, the Indian government has shown a major interest in Jatropha, and alongside other developing countries, a number of international groups are now sharing this interest. There have been substantial political and social pressures to promote the growing of such crops (in particular Jatropha curcas) in India, as a means of economic empowerment, social upliftment and poverty alleviation within marginalized communities.

Ecological Requirements

Jatropha curcas grows almost anywhere , even on gravelly, sandy and saline soils. It can thrive on the poorest stony soil. It can grow even in the crevices of rocks. The leaves shed during the winter months form mulch around the base of the plant. The organic matter from shed leaves enhance earth-worm activity in the soil around the root-zone of the plants, which improves the fertility of the soil.

Regarding climate, Jatropha curcas is found in the tropics and subtropics and likes heat, although it does well even in lower temperatures and can withstand a light frost. Its water requirement is extremely low and it can stand long periods of drought by shedding most of its leaves to reduce transpiration loss. Jatropha is also suitable for preventing soil erosion and shifting of sand dunes. 

Vegoil and biodiesel

Currently the oil from Jatropha curcas seeds is used for making biodiesel fuel in Philippines, promoted by a law authored by Philippine senators Miriam Defensor-Santiago and Miguel Zubiri. Likewise, jatropha oil is being promoted as an easily grown biofuel crop in hundreds of projects throughout India and other developing countries.

Toxicity

Characteristic of many members of the family Euphorbiaceae, Jatropha plants contain several toxic compounds, including lectin, saponin, carcinogenic  phorbol, and a trypsin inhibitor. Despite this, the seeds are occasionally eaten after roasting, which reduces some of the toxicity. Its sap is a skin irritant, and ingesting as few as three untreated seeds can be fatal to humans.

 

Jatropha: costs and benefits

Jatropha needs at least 600mm (23in) of rain a year to thrive. However, it can survive three consecutive years of drought by dropping its leaves.

• It is excellent at preventing soil erosion, and the leaves that it drops act as soil-enriching mulch
  
  
  
  
  
• The plant prefers alkaline soils
  
  
  
  
  
• The cost of 1,000 jatropha saplings (enough for one acre) in Pakistan is about £50, or 5p each
  
  
  
  
  
• The cost of 1kg of jatropha seeds in India is the equivalent of about 7p. Each jatropha seedling should be given an area two meters square.
• 20 per cent of seedlings planted will not survive
  
  
  
  
  
• Jatropha seedlings yield seeds in the first year after plantation

Digging Gold In Rural India

Agri-tourism is a Rs 4,100 crore opportunity. Are you ready to hit the village trail?

For Sunil Bhosle, a farmer in the Jogwadi village in the Baramati taluk of Pune district, a 13 acre piece of land tilled by his entire family round the year meant an annual income of Rs 60,000-75,000. This was before he was exposed to the benefits of agri-tourism six months ago. Bhosle, with the help of the Agri Tourism Development Organization (ATDO), opened his farms to tourists in June last year, charging each Rs 300-350.

He has since welcomed 150 tourists with traditional garlands and authentic Maharashtrian delicacies. The effort translated into an additional income of Rs 15,000, after deducting an equal amount in expenses. He is now constructing two more rooms for tourists.

"Agri-tourism has given Bhosle a full-time job,” says Pandurang Taware, Director, Marketing and Sales, ATDO. Taware is the brain behind the launch of a pilot project in agri-tourism in Baramati in 2005. Having spent around 17 years in the tourism industry, he realized that for marginal farmers, farming alone could not bring the necessary financial benefits. He felt that attracting tourists to rural India could open a new earning stream and help promote village handicraft, food and culture.

In the first year of operations, between October 2005 and October 2006, 8,700 tourists visited farms pooled in by villages in Baramati. The influx grew to 17,000 in the second year. Since October 2007, more than 21,000 tourists have taken the rural trail.

Old ways, new ideas                                

Agri-tourism is all about unraveling various facets of village life. This includes opening up farms to tourists from cities and abroad, and letting them spend some time in the lap of nature. Apart from telling them about the various crops and how they are sown and harvested, agri-tourism exposes tourists to authentic food, handicraft, dress, culture, music and language. Tourists get to indulge in rural activities such as bullock-cart rides, milking cows and goats and picking farm-fresh fruits and vegetable. The activities may vary from village to village, as a country as diverse as India has so many different experiences to offer.

Agri-tourism activities can help generate more jobs in rural areas, and thus reduce large-scale migration from villages to cities. Two-thirds of India’s population lives in villages, and agriculture is their mainstay. But unfortunately, unlike IT, agriculture is facing under-investment. So here is a chance to marry the benefits of agriculture with those of tourism.

“India has a global edge in its potential to offer unique experiences, particularly linked to rural India, which has tremendous wealth in its rich tradition, lifestyle, culture and wisdom. Unfortunately, tourism in these areas is at a nascent stage and it can therefore absorb much of the necessary expansion in the tourism sector as a whole,” says Tushar Pandey, Country Head, Strategic Initiatives – Government (SIG), Yes Bank. The private-sector bank is bullish on the prospects of agri-tourism in several states, particularly Uttar Pradesh. It is partnering with CII to study the potential of agri-tourism in Uttar Pradesh. The study is likely to be presented to the state government soon.

The Central Government has a scheme on rural tourism, as part of which various activities, such as improvement of infrastructure, are being conducted in a big way. The focus of the scheme is to tap the resources available under different schemes of the Department of Rural Development and state governments.

Setting up an agri-tourism farm doesn’t cost the earth. It can be developed in a village where farmers are willing to showcase their culture and traditions. All one needs to set up is a decent boarding and lodging facility for tourists. It is important to have a clean place and hygienic food. The spend on travel, food and accommodation is low and so it is easy to scale up the number of tourists they can receive.

Destimates
Number of foreign tourists who visited India in 2007	50 lakh
Number of domestic  tourists in 2007	40.6 crore
Total number of tourists in 2007	41.1 crore
Say, 10% of tourists are game for agritourism	4.11 crore
Tariff from one tourist  for a day	500 Rs
Say, each tourist stays for	2 days
Earning from each tourist	1,000 Rs
Estimated size of opportunity	4,100 Rs crore

“To make arrangements for 12 tourists, for whom you need to build four rooms, costs approximately Rs 5 lakh,” says Taware. (See Table 2: Money Matters)

A Rs 4,100 crore opportunity

The tourism sector is one of the major foreign exchange earners for the country. In 2007, 50 lakh tourists visited India, up from 44.5 lakh in 2006. Correspondingly, the foreign exchange earnings grew 33% to over $12 billion, compared to $9 billion in 2006. According to estimates, 40.6 crore domestic tourists criss-crossed the length and breadth of the country.

DAmoney matters
Number of foreign tourists who visited India in 2007	4
Size of one room	180 sq ft
Cost of constructing one room	400 Rs/sq ft
Cost of furnishing one room	300 Rs/sq ft
Total cost of one room	1,26,000 Rs
Total cost of four rooms	5,04,000 Rs
Earnings
Say, 10 tourists visit the village for	104 days/year
104 days/year	500 Rs
Gross earnings	5,20,000 Rs
Expenses
Monthly spend on food,  electricity etc	15,000 Rs
Annual spend on food,  electricity etc	1,80,000 Rs
Loan repayment of Rs 5 lakh	1,50,000 Rs
Total spend	3,30,000 Rs
Net Earnings per year	1,74,000 Rs

So, presuming that 10% of the total number of tourists may consider visiting various farms across the country during the year, the number would be close to 4.1 crore. Each person stays for about two days, and the tariff is Rs 500 per day. Thus the size of the opportunity is a whopping Rs 4100 crore!

Agri-tourism is now growing in a big way. However, it may take some time before it starts to grab a major share of the revenue generated from tourism-related activities. “In the initial stage, we expect only a marginal contribution, but in the long-term perspective of 10-12 years, we expect rural tourism to contribute about 7-10% of the total revenue generated from tourism and close to 10-15% of the total jobs in the tourism sector,” says Pandey.

There is a huge scope of developing various pockets of agri-tourism in the country, as India is a country of extreme diversity. “There is a saying in India that with every 12 miles you cross, the water changes, the culture changes and the food habits change. So at every 12 miles there can be an agri-tourism project!” says Pandurang Taware, Director, Marketing and Sales, Agri Tourism Development Organization

 Look before you leap

Here are a few things you have to keep in mind before taking the plunge.

Community exercise: An agri-tourism project is less about money and more about the rural experience. Therefore, a farm house in the outskirts of any city can never meet the basic need of agri-tourism. It is important to develop agri-tourism as a community exercise, which should involve every section of a village society. A big challenge is to convince most people in the ecosystem to play the role of a good host.

Location: The location of a village would play an important role in attracting tourists. Proximity to a big city can be a big positive because most tourists would prefer to spend less time on the road and more time in the village.

Marketing: Getting a village ready to welcome guests is not all, if tourists don’t get attracted to the site. Suitable marketing strategies need to be developed such as road-shows on a bullock cart! Internet could be the best bet to advertise an agri-tourism unit.

Accommodation: Providing clean and well-furnished dwelling units for tourists is very important. Some of them could be allergic to dust and pollens and would prefer to stay in a hygienic environment. This could be an uphill task.

Doctor on call: Although most tourists are advised to take precautions while moving around in a village but as a host, you have to be prepared for any untoward incident that might happen. Having a village doctor on call could help. If nothing, keep a first-aid box ready.