A STUDY ON THE FEASIBILITY OF FDI IN AGRICULTURAL MARKET INFRASTRUCTURE IN ASSAM

Surajit Borah
Department of Commerce, Sonapur College, Sonapur, Kamrup (Metro),
 Assam, India

Abstract
Foreign direct investment (FDI) is an investment made by an organization/entity in one country in an industrial/business activity in another country. FDI can take place in the form of establishing new business operations from scratch or acquiring existing business assets in the other country. In respect of total FDI inflow India is the second most important destination after China. The sectors that have attracted higher FDI inflows in India are services, telecommunication, computer software etc. In recent years, India has attracted a lot of FDI as a result of liberal FDI policies, strong economic fundamentals, market size etc. One of the important sectors attracting FDI in India is Agriculture sector. The width of this study will be confined to the agricultural sector of Assam. Traditional methods govern their agricultural activities. They lack proper infrastructure; like, electrification, roadways, permanent market sheds, construction of warehouses and cold-storage etc. Wastages are their regular expenditures due to prevail of rule of thumb practices. On the other hand, since the liberalization of Indian economy, many foreign Companies are also waiting to invest in Indian agricultural markets. But Assam has not been able to attract FDI due to lack of basic infrastructure. This research article is an attempt to put light on the present basic agricultural infrastructure available in the state, study the feasibility of FDI in agricultural infrastructure and suggest ways to improve basic infrastructure thereby attracting significant foreign investments to develop the agricultural market infrastructure and bring new challenges and opportunities expecting sustained growth in the agricultural sector.
Key words: FDI, Agricultural Sector, Infrastructure, feasibility, sustainable growth
1.   Introduction
Agriculture in Assam exhibits most of the characteristics of underdeveloped/backward agriculture, namely, a high dependence on agriculture for livelihood, widespread practice of traditional farming techniques and correspondingly low usage of modern farm inputs, low levels and low growth in productivity and incomes in the sector, widespread prevalence of subsistence cultivation, poor / inadequate agricultural infrastructure, and so on. About 86 per cent of the population in Assam lives in rural areas as per the 2011 Census. About 75 per cent of the state’s population is directly or indirectly dependent on agriculture, while about 63 per cent of the workforce in the state is actually engaged in agricultural activities. On the other hand, the sector’s contribution to the state’s income has been falling sharply over time, from nearly 50 per cent in early 1980s to only about 35 per cent by the end of 1990s.   

Even though the state is richly endowed in natural resources, such as abundant rainfall, alluvial soil, rich and diverse plant and animal genetic base, development of agriculture in Assam has been slow over the decades. Consequently, the state is not just lagging behind most other states in the country but is unable to meet its own requirements in many agricultural commodities.

Agriculture supports directly or indirectly three-fourth of the total population in Assam, contributing 20 per cent to the GSDP of the State, against 17 per cent of the national average. It provides employment to about 50 per cent of the people. All these show the significance of development of agricultural infrastructure.

Talking about the investment scenario of Assam, one finds that five states of the country such as Tamil Nadu, Maharashtra and Gujarat with their high level infrastructure and better quality of governance have cornered almost three-fourth of the total FDI. This is important against a backdrop of private investment becoming an important factor, as public investment alone cannot expedite the pace of development.


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