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Life Style : Live Life without Fear

Capital Market : Money Supply and Stock Prices

To dress or not to!

Education : The Need of the Hour

Fertiliser and Agriculture : Some Indian Facts

Life is a risk by itself. But, if you fear and take no risk, it will lead to taking more risks. It is too short a life to lead a scared and risk free life. By being afraid you are not gaining anything. It will not save you. In fact, it will damage you more. Fear prevents you from making any decisions. You can grow and be happy only if you take decisions that will lead to a more adventurous life. Also, if you fear you lose out on all the fun that life has in store for you.

Fear in a society arises due to many reasons - ozone, recession, pollution (water, noise and air), unemployment coupled with poverty, crime, sex, rape, arson, inferiority complex, jealousy, AIDS, etc. Fear arises because we begin to have a feeling that we are not able to control the course of our life which depends upon a number of external and internal factors.

Sometimes media overkill too is responsible for our fears. For example, sex is a joy. But due to the increasing threat communication about AIDS in the media, youngsters are not happy and elders frown upon the very word. They are afraid that our life will go berserk. Media, AIDS prevention groups and communication agencies are responsible for this fear psychosis amongst us. According to a study in the United States, AIDS ranks only eleventh as against heart disease and cancer which top the list of severe death causing diseases.

There can be found a prevalence of undue fear amongst youngsters about marriage and sex. In the Indian environment sex is not discussed in public and is a taboo in most homes too. The yet-to-be-married class is afraid of marriage and sex, because they fear that they can not satisfy their partners. Further, they are also afraid of the expected financial mess. However, the prudent psycho should be to take up the challenge as an exciting adventure in life.

There live in this country a huge potential of yet-to-be-married ones who postpone their marriage due to multiple fears. In fact by postponing the marriage for too long, they are asking for more trouble. Even late-marrying couples want to postpone child birth, due to the increase in financial commitments and the fear of added responsibilities. In an environment where infertility rates are increasing with the rise in age of women, are these decisions prudent? In fact, they may have to spend more to have a baby through artificial insemination in the event of an infertility. Further, the practice of using female contraceptives in preference to condoms, may have side effects and the female user may end up paying more health cheques.

The other damage to your life happens through misconceptions in personal/personnel relations, thanks to undue fear. This is due to over-imagination. For example, you think what others (life partner, family, society. etc.) will say if you are going to resign your job and start your own business. So, you do not decide to leave the job. You end up doing what others want and not what you want in your life. Thus you are not happy. And you end up losing your valuable life time by worrying. Why not kill your fear and do what you want to and be happy. (In fact, the author herself lost two years of life in the process of her career decision.)

Everyone is aware that the financial capital of India is Mumbai (Bombay). If you are seeking a career in the financial services industry you should land up in Mumbai. But, you fear of Mumbai’s transport, food, environment, culture etc. and do not opt for employment in Mumbai. Thus you end up losing on your career even before starting it. Those who want to work in Bombay must develop ways of coping with its life and its hardships.

Sometimes fear is rather created than a self evolved one. Say for example academic pressures, excessive parental expectations, peer pressures, etc. lead some children to fear life and attempt suicide. All what they need is concern, care and emotional support, because, suicide is a cry for help. Children should be taught to fight a crisis, rather than parents creating a crisis. This is more evident when the tenth and plus two results are announced. The papers are full of cases where children have committed suicide due to the pressure of performing up to the parents expectations.

How does one overcome fear? One way is to take life as it is and enjoy all that happens in your life. Read self motivational books, get good guidance, make your career decisions fast, be brave to take a risk, feel contented and take a break when you need one. Remember, the power to change the course of your life lies with you and not others. So be bold and exercise this power and above all understand that, "Life is too short to worry", SO BE HAPPY.

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Preamble

In the literature of finance, the universally accepted proposition is that the changes in monetary policy strongly influence the changes in security prices. This has led to several research attempts to isolate money supply as one of the determinants of changes in stock prices. One of the primary aims of this article is to bring out the established economic theory which forms the basis of the analysis and to assess various studies in this field. The other is to estimate the relationship between the stock prices and the money supply with or without lags in the Indian environment.

Theoretical Background

Supply of money affects industrial security prices through several ways. According to Friedman , the quantity theory of money is a theory of the demand to hold money. The demand to hold money varies according to the variations in the money supply. Imbalance in portfolio is caused due to an increase in money supply. Since investors like to retain the proportion of money constant in their portfolio, they allocate their excess money balances to other uses, such as buying more commodities or to acquire more financial assets.

Thus, when demand for stocks increases, the stock prices will raise.

Interest rates, also, have an impact on stock prices. If commercial banks' rate of interest on deposit accounts (time deposits) or lending rate is lower, implying a loose money policy, then money supply will raise which, in turn, will give rise to increase in stock prices and vice versa. Thus, interest rates and stock prices have an inverse relationship.

Earlier Works

Friedman and Schwartz (1963) have thoroughly documented the historical record of the empirical relationship that exists between changes in the growth rate of the stock of money and subsequent changes in aggregate economic activity. Their empirical results indicated that when there is a change in money supply, the initial effect is on financial markets and subsequently on the aggregate economy. In terms of securities market this would indicate that there should be a relationship between changes in the growth rate of money supply and changes in stock prices, that is, changes in the growth rate of the money supply should precede changes in the level of stock prices.

Since Milton Friedman's and Anna Schwartz's (1963) monetary theories have been so widely discussed, substantially confirmed by experience, and increasingly accepted - much attention has been focused on money supply changes as precursors of changes in both general economic conditions and stock prices. Sprinkel, Beryl (1964) has confirmed the existence of the relationship between changes in money supply growth rate and changes in stock prices. However, he has, also, found that the timing is not always consistent and the lead appears to be getting shorter. Subsequently, Palmer (1970) has tested the relationship between the money supply growth rate and a moving average of percentage changes in stock prices and concluded that money supply, generally, leads to stock price changes, both having a consistent relationship. Keran (1971) has developed a model intended to explain the level of stock prices that included money supply growth as one of the affecting factors. While the overall results are quite good and the money supply variable is, statistically, appeared to be slight. Homa and Jaffee (1971) , using regression analysis have found that money supply and growth in money supply, explain the stock price variations significantly. Their empirical results reveal that an investment policy which considered money supply, outperformed a buy-and-hold strategy, whereas mixed results are found when money supply is not considered.

Hamburger and Kochin (1972) have checked whether money supply has had a direct impact on securities market and its influence on stock risk. They have found that money supply changes do have a direct effect on share prices and its volatility has an impact on stock risk.

Though the above works revealed a strong relationship between changes in supply of money and security prices and few indicated that money supply led stock prices, there are studies which questioned these findings, in contrast. Miller (1972) , on statistical grounds, has objected to Keran and Hamburger-Kochin studies; Pesaudo (1974) , after reexamining the models and by using Canadian data, has concluded that "Finally, the fact that these models do not appear to have captured stable structural relationships suggests that one should not attach undue importance to their quantitative estimates of the impact of changes in the money supply on common stock prices." Auerbach (1976) likewise has questioned the Keran and Homa-Jaffee findings based on statistical reasoning. He has removed the trend and cyclical components of the money and stock prices series and correlated the adjusted series. The results indicate that the past changes in the M money supply are not related to future stock price changes, but that stock returns are related to current and future changes in the M money supply series, although the relationship is weak. Rozeff (1975) has tested Sprinkel's theory and found that current changes in stock prices are for all practical purposes unrelated to past changes in money growth rates.

Very few studies have been reported using money supply data in the Indian context except the works of Chawla, D. and Srinivasan, G. (1980), and Ramachandran, G. (1989).

In sum, to quote Rozeff , "It is simply not true that past money supply data can provide a profitable guide to investment timing or improve a portfolio's rate of return. Information is reflected in stock prices so rapidly that published data tell the investor virtually nothing about the future changes in stock prices. In particular, Sprinkel's trading rule, which uses the money supply as an indicator of future stock market movements, cannot be executed without prior knowledge of business cycle turning points and, when applied mechanically, does not outperform a naive buy-and-hold policy."

Data Base and Methodology

A random sample of 59 actively traded Indian shares on Bombay Stock Exchange for the study period 1980 to 1989 have been selected for the purpose of this study and the weekly closing prices of the sample have been collected.

In order to assess the influence of money supply and its derivatives (that is, lagged variables) as explanatory variables on share prices, linear regression analysis has been used.

Research Results and Practical Implication

There exists a positive relationship between the price variation and the current money supply variation. However, the impact of current money supply on the share prices is numerically higher than future impacts, corresponding highest value being +0.087285.

Though the regression results strongly reveal the positive association between stock prices and current and future money supply, can this, in practice, be utilized successfully as an instrument for investment decision making process?

It is worth to point out, in this context that Indian money supply definition does not include the operations of non-monetary financial institutions such as life and general insurance corporations, development banks, investment and trust companies and the Unit Trust of India. Also, during the decade of 1980 the non-banking finance companies grew at a considerable rate (In 1981, fixed deposits mobilised by them was Rs. 1475.7 crores. It increased to Rs. 10484.9 crores in 1989 and further to Rs. 17236.2 crores in 1991. [Source: RBI]). The Indian definition of money supply does not take this into account.

Thus, it can, comfortably, be concluded that inspite of the existence of positive influence of money supply data on security prices, it can not be used, beneficially, as an indicator by which one can forecast the future share price movements.

Concluding Remarks

Inspite of a statistically significant regression model, it may be difficult or impossible to explain the movement of share prices through the use of structural model. The reasons are:

(a) Data are not available for all those explanatory variables which affect share prices; and

(b) To obtain a forecast for Y from a regression equation, those explanatory variables that are not lagged must themselves be forecasted, and this may be more difficult than forecasting Y itself.

Thus, there is a need to seek for other means of obtaining a forecast for Y. Such an alternative approach is modern time series analysis.

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As this gets underway, I am reminded of a story from our younger days. "The Emperor who wore no clothes". The story goes like this : It so happened that the Emperor was very fussy about the clothes he wore (his tailors were a hassled lot). And one day he was duped into not wearing any. But living in today's world he would have been a happy man. What with a Louise Phillipe, Van Heusen, Arrow, Proline, Pepe, Flying Machine, Allen Solly and others hitting you in the face be it the press, audio or any other media you turn to.

Today's world of garments has turned anyone and everyone into a fashion conscious yuppie. No longer are the head-of-the-family dominated shopping prevalent. Even a toddler today (before he utters m-u-m-m-y or d-a-d-d-y) says J-e-a-n-s followed by the brand name. Such is the effect of high pressure branding resorted to by the major ready made garment companies that today's mom and dad are in for a culture shock when the child puts its foot down about the dress he chooses to wear.

The ready made garments market today has leaped to an amazing Rs.8000 crores industry from a paltry Rs.250 crores a few years back. Out of which the branded menswear market consisting of shirts, t-shirts, sweatshirts, gym wear, denim shirts, casual trousers, formal trousers, partywear and accessories like ties and socks is estimated at Rs.900 crores. In terms of value, the growth rate of the readymade industry is put at 30 - 35% annually.

All the major shirting companies (brace yourself for this) get a half sleeved shirt/full sleeved shirt (of course a semi finished one) at Rs.32.50 and Rs.36 respectively from jobbers. By the time it reaches us on the shop shelf, it is tagged at a whopping Rs.500 and upwards. A clean margin of Rs.450 plus. Considering their expenditure on advertising, retailer margins, transportation, showroom overheads etc. clothing companies still manage a neat profit of Rs.300 plus. All this for a monogram of a crown or an `A' with an arrow on the cuff. Thanks to gullible consumers like us.

I am sure that buying the exact fabric and with proper instructions to your tailor (not to forget the monogram) you will end up with a shirt matching the very best. But unfortunately our macho man believes in shopping out at those trendy and flashy what-you-call boutiques or showrooms. A burgeoning upper class and a fashion-conscious growing middle class taken in buy hyper advertising sometimes bordering onto histrionics are only to be blamed.

Cashing in on this boom are the numerous. Jeans, shirting and suiting companies. The result being today's pricing, that is more concentrated on the brand and its image rather than the actual product itself. A Louis Phillipe or an Arrow commands a premimum just for that monogram (which, most people buy it for) while a similar quality shirt or pant is

available at a Kumar's, Cambridge or Weekender. Here too the culprit being 'us' - the consumers and partly enticing advertising.

Companies like Denim, Arvind, Allen Solly etc. can afford to pile crores of money on to advertising and in creating exquisite showrooms. Walk into a Levi's or a Benetton and you will find 200 watts of music, CTV's et al, tempting you like the proverbial apple. But can the smaller brands afford these. The point worth pondering is that the advantages of allocating a portion of your profits for advertising can do wonders to your brand.

Maximum volume of purchases of ready made garments were in the lower income group, according to a survey - Consumer Market Demographics in India - conducted by NCAER. Of the total purchases of their product group, more than 65% were purchased by low and lower middle income households. The respective shares of purchase in these two classes were 33% and 32%.

In case of shirts, more than 70% of the total purchases were made by these two income classes. For trousers, the share of purchases was around 61%. Jeans were not very much popular among the low income group. Jeans found more favour with the middle income group. This income group accounted for 38% of the total purchases. Lower-middle income group accounted for 20% and the upper middle income group had a share of around 17% of the total purchases.

Thus, we find that in the centre is the Middle Income Group (MIG) which again like in other segments has a decisive say in what is sold and for what price.

This MIG is so important that most of the ready made manufacturers are re-focusing their attention. Leading to sub-brands at lesser prices. Like the Arvind Group that has come out with 'Newport Jeans' against its torch bearer 'Flying Machine' and T.shirts at a much lower price. And this in a market , where a good quality branded jean is available upwards of Rs.600 only. Another innovative brand extension is Ruf and Tuf , which is India's first self stitchable jeans. What could be the reason?

One could be the price sensitivity displayed by this group. Second could be fashion backed quality consciousness. And third could be the conservative approach (which no amount of advertising and direct selling is likely to change). One more reason could be the brand loyalty which of course is suspect.

But the question to be pondered over is whether Newport will be able to sustain itself. Already there are rumblings about the thin material used and lack of quality finish. Not repeating the mistakes of Arrow or Allen Solly is John Miller - positioned as `the Great American shirt', who has entered the fray at a lesser cost and targetted the MIG's forcing established and leading brands to rethink its pricing policy and product range. So the competition is left with fewer options. One would be drastic price cuts, increasing retailer margins, establishing exclusive franchisees or trying out new innovations.

Attacking the LIG and MIG segments are retail outlets like Saravana’s, Jaychandra and Funtoosh in Chennai have launched shirts and trousers at an amazingly low price of Rs. 20 to 25.

'Proline' the silent player for long has taken the lead in innovative concepts in what is termed as the `Oxford Gift Pack (OGP)'. An OGP consists of a shirt, a tie and a pair of socks in a single gift pack.

The Rs.1000 crore Bombay based Modern Group hitherto turning out fabric materials and terry towels is planning to enter the ready made garments - exclusive showroom segment. A couple of other players like Levi's and Mafatlal have gone one step ahead. They are now talking about a multi-product shop rather than a exclusive showroom. A fallout of all this is that today we get the same designs at lesser prices in lesser known brands. Then is the premium charged by the leading brands justifiable?, this is something the end - consumer has to grapple with. Is it going to be just "the look of a winner" or "the better known look of a winner?"

Possible answers to the above queries could be had in part with fashion designers. Today's fashion designer mainly targets the top-end consumer and that too most of their

designs have practically zero applicability being restricted to just the ritzy and glitzy world of catwalks.

Thankfully, the change is already in the offing. Friday Dressing from Allen Solly is set to change the way dreary company executives dress nowadays.

Or the other way out is like Arvind which has got a jean catering to every segment. Newport for downmarket, FM for midmarket, Ruf and Tuf for the ready-to-be-stitched. The reason for such large scale segmentation is the mega-influx of foreign brands some at mind boggling prices and some at reasonable ones.

And what about the oft repeated claims of brands being the No.1 and having a national out look? The fact is no brand can be called truly national in that it has a large market share in every region of the country. Further, the dominant position in the market for ready made garments is within multitudes of regional and local brands which account for 50% of the total purchases of jeans, and over 80% of the purchases of trousers and shirts. This may well be due to high taxes on branded products in the past few years that could now change as aggressive brand marketing develops.

The physical demographics of the country pose another major problem for marketers. On one hand if it is the distribution and transportation costs given the wide area that is to be covered, it is the climatic conditions on the other. While Bombay remains moderate during the winter season, the North-Eastern region is very cold necessitating the need for stocking different garments. So the question confronting marketers is how to stick to an uniform pricing policy keeping in mind seasonal changes that result in a change of assembly line. One solution could be like in the West, wherein the entire years' production is planned based on the previous years purchasing pattern in the process freeing the shopkeeper from the worry of high inventories.

The same NCAER survey also reveals that while shirts sell more in the East (45.75%) in terms of quantity. Pants are more sought after in the West (37.18%). The West too love jeans more (41.49%). The rest of the country being generally moderate in terms of buying ready made shirts, pants and jeans.

It is interesting to note that purchases of branded ready made products cut across income groups and the urban-rural divide but they are far more relevant at the higher levels of income than at the lower levels.

So today we have a situation wherein the Indian male has come a long way from his shirtless, dhoti-clad image to the one who display's with aplomb that he too is wearing an international label and at the same time not being ready to compromise on the quality factor which has actually accentuated the demand for better stuff.

To conclude we can safely say that the ready made garment scene is hotting up with more money being pumped into advertising and innovations being tried out by leading brands. With more international brands coming in the scene is really hotting up. Also playing a decisive role is the MIG sector whose purchasing power is increasing with increase in average salaries. So the writing on the wall is clear. No longer can the consumer be taken for granted. His is a genuine demand for better quality at a more reasonable price. Hence all manufacturers better pull up their socks’ or someone will pull down their pants.

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Human capital has been recognised as the major vehicle for the growth and development of any economy. Education, a major component of human capital (apart from health) plays a vital role in economic growth. There is a high correlation between education and economic prosperity.

It is a sad state of affair, that in India the importance given to education, even at preliminary levels itself is very negligible. India is only proud of its constitutional goal of universal elementary education. In reality, there are approximately 63 million children in the age group of 6-14 estimated to be away from school. In 13 States in India, over 85 per cent of women are illiterates. According to United Nations Development Report, India has a long way (centuries) to go. For example, Uttar Pradesh needs 92 years and Bihar needs 121 years to reach cent per cent literacy rate. The department of education, the ruling governments and the policy makers have not realised the urgency of the situation.

With education, many other socio-economic issues can be addressed. For example, infant mortality rate is directly correlated to primary education. In Orissa with 35 per cent of literacy, the infant mortality rate was 112.1 per thousand, as compared to Kerala with highest literacy rate, only 24 infants per thousand died. Further, the use of birth control is also directly correlated with education. Similarly, child’s immunisation is also related to education. Thus, education plays a vital role in socio-economic improvement of India.

Further, education helps in all aspects of an economy. For example, illiterate farmers who are not able to read the instructions provided by the fertiliser and pesticide companies, not only destroy their health but also a superior harvest. Thus, education helps for better agricultural out put also. In a country like India where agriculture is the backbone of the economy, literacy will definitely bring more output.

Either over population nor lack of funds can not be stated as the arguments for not providing sufficient education. Because, in China - which has more population compared to India - the average adult spends five years in school; and a Sri Lankan puts seven years in school. However, in India it is only about two years.

Another argument usually provided by the authorities is that children do not want to study, since they want to work even as child labourers. However, this argument was found invalid by the published Report on Basic Education in India (PROBE) by Delhi School of Economics. According to the PROBE survey, 98 per cent parents said that boys should be educated and 89 per cent wanted girls to be educated. PROBE also found that only a small minority of children are full time labourers. More than 80 per cent of parents preferred compulsory primary education for children. Thus, the labour arguments by the government authorities do not hold good.

With respect to the quality of education, it is believed that private schools provide better quality compared to government schools. It is true and an undisputed fact that schools run by the government in India measure far below acceptable standards. But, there is a paradox too. Tutors of private schools do not receive even 50 per cent of the salary which the government teachers are getting. But, private schools provide superior education. This implies that the selection process of government school teachers itself is wrong, thanks to political interference in selection boards.

Government schools or its authorities claim that private schools have more fund to provide superior education. This fund problem can be solved by the government if it thinks prudently, with out utilising public money. How? For example, there are various private sector companies in this country involved in social activities. Identify them. Make them support/adopt schools. Computer firms or computer education companies will be willing to sponsor computers plus skills to government schools. Only thing is that the government has not started its thinking process in these lines. It always complaints that it lacks funds, Not findings ways out. Thus, with a well carved out strategy involving entrepreneurs the financial problems of government schools can be solved.

The educational policy pursued during the last half a century can be summarised in four words according to Dr S.Ambirajan, "Planned drift and criminal neglect". The government has failed to reduce the number of illiterates even after 50 years of independence. In fact, increased that figure to a great extend. This is due to the fact that the Indian government is incompetent, and totally careless in setting its priorities.

Indian government does fund allocation for education with out any well carved out strategy. It has allocated in the last Budget (1999-2000) Rs 1136.69 crore for higher education and university education. Ideally speaking, university education should be made privatised, which will make Indians to shift to earn-and-study culture rather than study-and-study culture. Thus, these funds can be made available for primary education.

Another area of importance with respect to education in India is adult literacy rates and its lags. India has around 30 per cent of adult illiteracy population in the world. Since independence multiple attempts have been made by the planners to tackle this problem. However, they could not succeed. Because, their planning was at a national level. Thus, the issue of adult illiteracy can be handled only at the regional scale with decentralised planning. The objective of education for all was established by the UNESCO, World Bank and UNICEF and it is a fact that more than monetary contributions, it is the human will and the close link of education with primary schooling are vital to cover the literacy lag of India.

To sum, India has comfortable raw human power. Only if this raw power is converted into skilled man power, it will help in Indian economic development. If educational need of the nation is not attended swiftly, it will also add additional burden to the government, such as increase in crime rates, higher health expenditure, more subsidies, etc. Thus, a swifter action with a well carved out and integrated strategy with respect to education is the need of the hour which Indian government and policy makers should attend to.

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Being the largest sector in India, agriculture has been  the main  source  of  livelihood for over 60  per  cent  of  the population  - directly or indirectly - and its  contribution to National Income along with allied occupations, such  as, animal husbandry, forestry, fishery, pottery etc. is  around 30  per cent. Thus, agriculture frames the backbone  of  the Indians and Indian economy.

At  the  post  independent  era,  the  vital  goal  of   the government   was   to  achieve  self sufficiency   in   food production.  Thus,  the  price  level  of  fertilisers   was controlled by  the government to make it reachable  to  the farmers.  Due to this encouraged government  policy  towards agriculture, India witnessed higher production coupled  with superior  productivity in the agricultural sector, which  in turn led to the Green Revolution.

The  agrochemicals industry constitutes 23 per cent  of  the total inputs of the agriculture sector. It is generally well recognised  that  fertilisers act as catalysts  in  inducing farmers to adopt other improved management practices,  apart from their direct effect in raising agricultural production. With   the  subsidy-support  the  demand   for   fertilisers consistently  raised, also the subsidy bill.   

The accepted ratio of three major nutrients N:P:K was 4:2:1. NPK  Ratio in India since 1991-92 is shown in Table-1  below which  indicates the depletion in the required nutrients  of the soil, due to the imbalance in the usage of  fertilisers, thanks  to  the deregulation of  phosphatic  fertilisers  in 1992.    However,  based  on  increased subsidies  by   the government,  the nutrients consumption is expected to go  up in such a fashion to alter the NPK ratio to atleast  7:2.4:1, which depends upon monsoon, ofcourse.

NPK Ratio in India

Year NPK Ratio

1991-92 5.9 : 2.4 : 1

1992-93 9.5 : 3.2 : 1

1993-94 9.7 : 2.9 : 1

1994-95 8.4 : 2.6 : 1

1995-96 8.6 : 2.5 : 1

Source   :   Business  India, August 12 -  25,  1996,  p.85, Express Investment Week, January 29 -  February 4, 1996, p.26 and Economic Times, July 8, 1996, p.V.

Note : NPK Ratio = Nitrogen : Phosphatic : Potassic

 Demand - Supply Scenario

Government of India constituted working group on fertilisers for  the Eighth Plan period indicate a supply gap of 42  per cent  for  nitrogenous  fertilisers and 22.6  per  cent  for phosphate  in Southern Region of India, as compared  to  the corresponding  all  India figures  of  13.5  per  cent  for nitrogen and 29.6 per cent for phosphatics.

India  is  not  sufficient in respect of any  of  the  three nutrients  viz, N, P and K. While the entire requirement  of potash are met through imports, part of N and P requirements are also  met through imports. In 1995-96,  the  indigenous production of N and P was in the order of 82 per cent and 72 per cent respectively of consumption, leaving the rest to be met through imports only. This situation is not  likely  to change in the foreseeable future.

Currently there are 58 large size fertiliser units in  India manufacturing    a   wide   range of nitrogenous    and phosphatic/complex fertilisers. Besides, there are about  80 small    and medium   scale   units    producing    single super phosphate.

Bio-Fertiliser : An Alternate

Once   agriculture  was  linked  with  nature  and   culture.  However, this scenario has undergone a drastic change whereby   agriculture  has become a commercial proposition. But,  how  far this commercial venture is beneficial for a nation in the  long-run is a serious concern.  Though agricultural production rose, thanks to  high-yielding chemical  fertilizers. But, this has led to  the  continuous export  of  fertility of the soil, yielding great  amount  of ecological  disastrous - soil damage, health  problems,  high irrigation demand  etc.   In  this  context,   it   becomes inevitable  that  farming sector has to rely much  upon  bio-fertilizers rather than chemical fertilizers, in future.

 Bio-fertilizers  are  new  generation,  cost  effective   and  renewable  sources of plant nutrients to supplement  chemical  fertilizers.    Bio-fertilizers  include   selective   micro-organisms  like  Bacteria,  Fungi and  Algae.   These  micro-organisms  are  capable  of fixing  atmosphere  nitrogen  or converting insoluble phosphates in the soil into an available form.

Research  findings  have established that up to  800  gms  of  Biofertilizers applied to one acre will fix 10 kg of nitrogen  in  the soil, which is equivalent to the nitrogen content  in half  a  bag  of  Urea. Also, 800 gms  of  another  type  of Bacteria,   viz.  Phosphobacteria, can   convert   insoluble phosphates  in  the  soil and make available about  5  kg  of phosphate per acre to the crop.

Biofertilizers  also secrete growth-promoting substances  and improve soil properties by leaving organic residues. Biofertilisers   are   not  only  cost-effective   but   also environment-friendly  and  are  from a  renewable  source  of energy. There is vast scope for production and marketing  of Biofertilizers in India.

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