Indian Agriculture Industry

Introduction

Agriculture is the dominant sector of the Indian economy, which determines the growth and sustainability of the country too. India is the second-largest producer of food in the world and holds the potential of being the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. About 65 per cent of the population still relies on agriculture for employment and livelihood. The sector contributes approximately 16 per cent of total gross domestic product (GDP) and 10 per cent of export earnings.

During 2012-13, the agriculture sector is expected to witness a growth of 2.4 per cent, according to the National Council of Applied Economic Research (NCAER). The Gross Capital Formation (GCF) in agriculture and allied sectors was Rs 142254 crore (US$ 25.68 billion) in 2010-11 as compared to Rs 76,096 crore (US$ 13.71 billion) in 2004-05, as per the Annual Report 2011-12 of the Department of Agriculture and Cooperation.

The green revolution transformed India from a food deficient stage to a surplus food market. In a span of three decades, India has become a net exporter of food grains. The transformations in the sector are due to factors such as new and improved technologies, easy credit facilities, interest of the organised sector, rapid growth of contract farming, and investor friendly Government policies.

Market Dynamics

Exports of agricultural products are expected to cross US$ 22 billion mark by 2014 and account for 5 per cent of the world's agriculture exports, according to the Agricultural and Processed Food Products Export Development Authority (APEDA).

Sugar output in India grew 13 per cent during October 2011-March 2012, to touch 23.2 million tonnes (MT) as compared to 20.45 MT in the same period last year, according to the Indian Sugar Mills Association (ISMA).

Further, cotton yarn exports have increased by 15 per cent during 2011-12, due to rising demand in the foreign markets. During the last financial year, 872.68 million kg of cotton yarn were exported, as compared to 720 million kg in 2010-11, according to the data compiled by the Directorate General of Foreign Trade (DGFT).

Meanwhile, oil meal exports from the country has registered 8 per cent growth in volume and touched a figure of 5.5 MT in the financial year 2011-12 as compared to 5.1 MT in 2010-11.

The Asian Development Bank (ADB) will provide a loan of US$ 67 million to Bihar for expanding agriculture value chain and to facilitate linkages for small farmers with food processors, agribusiness entrepreneurs and service providers in Mazaffarpur, Patna and Nalanda districts.

Major Developments and Investments

The total planned expenditure for the Department of Agriculture and Cooperation is increased by 18 per cent from Rs 17,123 crore (US$ 3.08 billion) in 2011-12 to Rs 20,208 crore (US$ 3.64 billion) in 2012-13. The outlay for Rashtriya Krishi Vikas Yojana (RKVY) is being increased from Rs 7,860 crore (US$ 1.42 billion) in 2011-12 to Rs 9,217 crore (US$ 1.66 billion) in 2012-13. Further, the amount of Rs 10 billion (US$ 180.10 million) has been allocated for "Bringing Green Revolution to Eastern India" initiative, compared to Rs 4.0 billion (US$ 72.04 million) in 2011-12.

The sector attracted foreign direct investments (FDI) worth Rs 93.18 crore (US$ 16.78 million) in the month of May 2012 as compared to Rs 29.58 crore (US$ 5.33 million) during the corresponding month in 2011.

The National Bank for Agriculture and Rural Development (NABARD) has increased financial assistance in Gujarat by 50 per cent in 2011-12, to Rs 4,340 crore (US$ 781.63 million) as compared to Rs 2,894 crore (US$ 521.21 million) in the previous fiscal. The assistance is provided mainly for supporting agriculture, rural development and rural infrastructure development in Gujarat.

Government Initiatives

The Government of India has allowed 100 per cent FDI in the agriculture services under automatic route covering horticulture, floriculture, development of seeds, animal husbandry, pisciculture, aquaculture, cultivation of vegetables, mushroom and services related to agro and allied sectors.

Some of the initiatives taken by the Government of India are:

• The Government has taken various policy measures to increase availability of institutional credit to farmers. The annual agriculture target for the financial year 2012-13 is fixed at Rs 5,75,000 crore (US$ 103.56 billion) against the target of Rs 4,75,000 crore (US$ 85.55 billion) in 2011-12
• The Union Cabinet has approved the proposal of the Ministry of Agriculture, Department of Agricultural Research and Education for the establishing the Indian Institute of Agricultural Biotechnology at Ranchi (Jharkhand) at a cost of Rs. 287.50 crore (US$ 51.78 million) during the 12th five year plan
• The Indian Council of Agricultural Research (ICAR) has established 44 Agricultural Technology Information Centres (ATICs) in 28 Agricultural Universities and 16 ICAR Institutes in the country. ICAR has also created a network of 630 Krishi Vigyan Kendra (KVK) in the country to facilitate farmers' access to agricultural technology generated by the National Agricultural Research System (NARS)
• The Government has launched an initiative to spend US$ 65.1 million to promote 60,000 'pulses villages' in rain-fed areas for increasing crop productivity and strengthening market linkages
• Spice Board of India plans to promote exports of spices by establishing 25-30 spice parks in different parts of the country. This will help in achieving export of spices worth Rs 30,000 crore (US$ 5.40 billion) by 2020, as per Dr G K Vidyashankar, Deputy Director (Marketing), Spice Board

Road Ahead

The country provides various opportunities for agri input segments such as seeds and plant growth nutrients. There is a huge demand for quality branded seeds in India. Further, the demand for cold storage, warehouses, supply chains, etc. will also grow rapidly in the coming years.

In the 12th five year plan, the Government will focus on "mechanization of agriculture" to match the growing need for higher production of food grain and to tackle labour shortages in the farm sector. The Government is committed to at least double the spending on research and development (R&D) in the farm sector by the end of the 12th five year plan from the existing level of about one per cent of gross domestic product (GDP).

The Government has taken many policy initiatives and missions to strengthen the farm credit delivery system for providing credit at affordable rates of interest to support the resource requirements of the agricultural sector.

Indian Education and Training Industry 2012

Brief Introduction

With a growth rate of 10 to 15 per cent expected over the next decade, the Indian education market has witnessed a series of developments and changes in the last few years, which has resulted in a significant increase in the market size of the education industry compared to previous years. With a combined market size of US$ 50 billion per annum with more than 450 million students, and investment requirement of approximately US$ 100 billion by 2014 to meet growing demands of the sector, education industry is one of the largest service sector industries in India.

Market Size

The education industry in India can be broadly classified into the Regulated segment (K12 and higher education) and the Un-regulated segment (pre-school, multimedia, ICT, coaching cases, vocational training and books). The expected market size of K-12 sector in 2012 (E) is US$ 34 billion, with a rise of 14 per cent as compared to US$ 20 billion in 2008. The corresponding figures for the higher education sector are US$ 10.3 billion in 2012 (E) with a rise of 12 per cent as compared to US$ 6.5 billion in 2008. The coaching institutes in India will witness a 17 per cent increase from US$ 0.3 billion in 2008 to US$ 0.6 billion in 2012 (E). Similarly, the Pre-schools market in the country will witness a rise of 36 per cent from US$ 0.3 billion to US$ 1 billion and the vocational training from US$ 1.6 billion to US$ 4 billion in 2012 (E).

"The Indian pre-school market is set to become the largest in the world. In India, the pre-school segment is currently worth US$ 750 million and is expected to reach US$ 1 billion by 2012," as told by Arun Arora, Chairman,Serra International Pre-Schools.

Private Equity (PE) Investments

The Private equity and venture capital investors have pumped US$ 93 million into 10 education companies by July 2011, and are bullish about the sector's prospects going forward according to Venture Intelligence. PE investment in the education sector increased from US$ 129 million in 2009 to US$ 183 million in 2010. The other large deals in the country include PremjiInvest's US$ 43 million investment in Manipal Education and India Equity Partners' US$ 37 million investment in IL&FS Education and Technology Services.

Government Initiatives/Policies : Union Budget 2012 - 2013 Highlights

Education

• For the year 2012-13, Rs 25,555 crore (US$ 4.98 billion) have been allotted for RTE-SSA (Right to Education - Sarva Shiksha Abhiyan) which represents an increase of 21.7 per cent over the previous year allotment in 2011-12
• 6,000 schools have been proposed to be set up at block level as model schools in the Twelfth Five Year Plan (2012-17)
• Rs 3,124 crore (US$ 0.61 billion) have been provided for the RMSA (Rashtriya Madhyamik Shiksha Abhiyan) which is an increase of 29 per cent over BE 2011-12
• In order to ensure a better flow of credit to students, a Credit Guarantee Fund has been proposed

Skill Development

• National Skill Development Corporation has approved projects that are expected to train 6.2 crore people at the end of 10 years
• The National Skill Development Fund has been allocated Rs 1,000 crore (US$ 0.19 billion) for the period 2012-13
• To improve the flow of institutional credit for skill development, a separate Credit Guarantee Fund will be set up
• "Himayat" scheme introduced in Jammu and Kashmir (J&K) to provide skill training to 100,000 youth during the next 5 years and the entire cost will be borne by the Government of India

Major Investments and Key Developments

• Chicago-based Encyclopedia Britannica intends to launch online learning and knowledge products in India. The Indian market, in which Encyclopedia Britannica has been present for 12 years, accounted for about five per cent of the company's global print sales. Britannica has sold around 1,100 of each edition in the country over the past 30 months.
• The Indian Institute of Management Kozhikode (IIM-K) has signed an agreement of co-operation with Leeds University Business School, UK to promote the internationalisation of efforts by the institute. The project intends to enable both the institutions to carry out activities such as exchange of students, exchange of faculty members and collaborative research on contemporary management issues.
• India developed Intel Future Scientist programme that aims to sustain the innovative streak in students, has been launched by the global chip maker, Intel Inc. The programme will provide support to teachers in transforming the method of teaching science and math subjects. The focus of the initiative is to help science teachers present their curricula from an inquiry-based perspective to help foster a spirit of research and innovation among their students.
• India's growing Rs 350 crore (US$ 68.33 million) executive education space continues to attract B-schools. US-headquartered Harvard Business School (HBS) will offer executive programmes at the TajLands End, at Bandra, in suburban Mumbai. The Wharton School of Business, University of Pennsylvania, will also set up its own centre in India. University of Chicago, Tuck School of Business, INSEAD, Oxford University's Said Business School and Duke University are among others, to offer their executive education programmes in India.
• Technology-based education solutions provider Core Technologies will set up 150 skill development centres across the country. With an investment of Rs 450 crore (US$ 87.86 million), these training centres will offer vocational training across disciplines such as automobile, construction, hospitality, retail, IT and IT-enabled services.
• IIHT Ltd, a technology-training organisation, along with Microsoft, has announced the launch of a certified cloud expert programme at Kochi Infopark. The programme would help information technology (IT) professionals acquire the necessary skills to develop into cloud professionals.

Road Ahead

With the focus on the Indian education sector, an increase in allocation for Right to Education - Sarva Shiksha Abhiyan and Rashtriya Madhyamik Shiksha Abhiyan reiterates the Government's commitment towards education. The increase in budgetary allocations for school education and adult literacy is also a welcome step for the future of the Indian education sector.

Exchange Rate Used: INR 1 = US$ 0.0195246 as on March 23, 2012

References: Press Releases, Media Reports, KPMG Report

Renting benefits for toy lovers

Parents spend huge amount of money on toys but kids soon get bored with them and desire for new ones. Thus this investment becomes a waste. As a result the concept of renting toys is emerging fast. Read on to explore the opportunity. 

 

Toys are an indispensible part of almost everyone’s childhood. However with toys becoming more and more expensive it is becoming difficult for parents to buy new toys and games for their little ones. Moreover kids get bored of toys very quickly and after few days toys become a waste and occupy lot of space. To avoid this and make toys more affordable the unique but functional concept of toy rentals has become popular in India. The concept is already quite popular in countries like New Zealand, Australia, and America where even the government funds such concepts. However in India toy libraries was an unheard concept till recently. With more of awareness, a toy library is an upcoming opportunity with many entrepreneurs already cashing in on this new concept. Read on to be more aware. 

Need for toy renting

Toys are still considered to be a luxury in India. Although parents spend huge amount of money on toys yet it is not a healthy investment.   Moreover kids get bored with the toys very soon making it a storing item. This brought the idea for buying toys on rent. The concept of rental toys work wonders for kids as well as parents. Let us have a look at the advantages of this venture:

• New toys without much expense: Kids usually get bored with toys, which are quite expensive. They store these in their playroom as useless items. However getting toys on rent saves money for parents as well as gives variety to the kid.
• Toys as learning experience: There is a continuous range of new toys available in the market. These not only provide entertainment but also knowledge to kids as well as their parents. Instead of buying them, toys can be taken on rent.
• Saves space: Presently everyone mostly have small compact houses without much storing space. Buying toys and storing them takes a lot of space. Therefore toys on rent save money as well as space.
• Play, learn and pass it on: The best thing about toys on rent is that they can be passed on to the next child when the previous owner gets tired playing with it. This way they do not get wasted.

Rental toy franchising:

Concept of renting toys is quite recent in the large bandwagon of franchising. However it is becoming more organised due to the various brands in the sector which have taken the franchise route for rapid and successful expansion. As informed by Toys-on-rent that Franchising is essential for giving the next big step to their business. Moreover seeing the success of this concept in other nations, they can be assured that it has a bright future in India also.

New and emerging players:

As mentioned the toy rental concept is quite recent, therefore there are few players who are benefitting from this concept till now. Few of them are:

• Toys-on-rent: The brand has recently opted for the franchise route. It needs a total investment of Rs 2,30,000 which would include the sign up fees and franchise set-up cost as well. Toys-on-rent is presently planning to open franchise outlets in Hyderabad, and Mumbai etc. 

• Planet Toyz: It is a fun library from where kids can get books, toys, games, CD’s etc on rent. The first outlet was opened in north Delhi. It needs an investment ranging from Rs 1.5 to 1.75 lakh with an area approximately 200 sq. ft. 

• Rent Me Toy: The toy library, headquarters at Mohali has recently opened. The brand has taken the franchise route for rapid expansion pan India. It needs an investment of Rs. two to five lakh.  

Play way for franchisees:

A toy rental franchise can be benefiting for aspiring entrepreneurs. There are not many requirements for taking toy rental franchise. Any aspirant with total commitment to quality and service can opt for this. Moreover toy rental concept is well suited for women who are home makers. They understand kids and love dealing with them. Few of its other benefits are mentioned below:

• Low cost but attractive returns: Taking a toy rental franchise is not very expensive. It is a low cost business opportunity which can fetch lucrative returns to franchisees.

• Easy to manage: Toy rental business is easy to run. As informed by Kapure: “The business can be managed at home with just a 6'X3'X3' storage space.”

• Staggered investments: The franchisees can keep expanding the business with no additional fees within their territory. Moreover adding more and more toys can give this business an easy leap.

Few hurdles on the way

Along with numerous benefits, this concept faces a few challenges as well. The understanding of rental toys among parents and kids is the greatest challenge. Moreover entrepreneurs have to keep updating newer toys, games and books in the outlet. This forms the major issue as one needs to add on toys keeping children’s expectation in mind.

It can be concluded that a toy rental franchise is low cost with high benefits and easy to manage as well. Therefore aspirants who love toys and kids can surely opt for this venture for a happy and fulfilling business growth.