New Delhi: Amidst talks about the mid-term elections getting louder, Commerce and Industry Minister Kamal Nath on 8 October warned that the “bubble” of 9% economic growth “can burst” if the benefits do not reach every person in every part of the country.
“While there is 9% growth in the country, this growth will not be sustained till it touches everybody... bubble will burst if we do not change the course of our growth which should go to every part of the country,” Nath said here at the FICCI India Rural Business Summit.
Nath said the Indian agriculture and the rural landscape were facing new challenges. He had recently asked the World Bank officials to look at the possibility of conducting a study to assess these challenges.
He also touched upon the commodity prices going through the roof all around the world.
“Food prices in Europe have increased by 6%-7% in the past 7-8 months, while edible oil, wheat and milk too are at record prices,” he said.
Describing rural indebtedness as the biggest challenge confronting the Indian farmers, Nath said adequate funding should be made available to farmers and rural entrepreneurs to bridge the rural-urban divide.
“The biggest challenge for farmers is indebtedness. The farmer’s desire to repay is not backed by his ability to pay,” he said.
While there is no dearth of rural entrepreneurs in the country, financing their business activities remains a major problem that needs to be addressed.
“Obtaining the initial funding for starting any venture is the most difficult activity for any entrepreneur. This is more so in the case of small entrepreneurs as banks find them unbankable and are generally averse to taking risks associated with such ventures,” he added.
He suggested micro-financing models can be used for stepping up the income-generating activities among the poor.
Later talking to reporters, Nath said as the WTO talks are gathering pace, India has asked the developed countries to cut their trade distorting farm subsidies.
“There is progress in talks and we are asking rich nations to reduce agricultural subsidies,” he said.