The elephant that didn't know its strength

Today I read a NEWS article from BusinessLine which says that India showed its strength during this global financial meltdown. Interestingly the writer noted a few points which attracted my interest. The author argues that the government supported its poor farmers by waiving farm loans and consumers by paving the way for low interest regime. Indeed the first package is very good. We still say that India is a country whose heart lies in villages. Its majority of population depends on farming. The country is blessed with mother nature for its natural resources.

Hence, I can confidently say that the country's core competence lies in farming. Its long term sustainability depends on how well the country encourages its public to take part in agriculture. Mr. Gandhi noted this point in his views. The same is now being reiterated by Mr. Abdul Kalaam by saying that we need to bring in more value added services in agro based products. The famous rocket scientist is of the view that the country can grow by improving agriculture and diversifying horizontally in a concentric circle without affecting the growth of other industries.

Interestingly in my previous blogs I had mentioned that the liberalisation policy of IMF and World Bank forces one country to reduce subsidies to farmers and health care there by reducing the governmental expenditure. If India is following this then the country is spoiling the growth of its core competence. Consider western powers they do not have abundant natural resourses where everything grows and delivers productive outputs. They can reduce governmental expenditure by reducing spending in agricultural subsidies. But a country like India which is proud of its nature cannot afford to deviate from its core competence. This can spoil its competitive advantage among global nations.