Monday, December 7, 2009


Capitalistic system of governance is supposed to leave the business to businessmen, confining itself to the sacred function of ensuring consumer protection from economic and safety considerations. In India during Nehruvian days government entered the business in a large way and practically every industrial sector was dominated by public enterprises with government investment. It was only recently that government changed its policies vis-à-vis industry and allowed private sector to flourish. But entrepreneurship development requires constant government support and it is the duty of the government to come to the aid of industry when ever there is an economic downturn or demand slump. Look at a country like the US, the very epitome of capitalistic economy, where government provides prop for the private industry through public purchase programs in a large way.

"In his appearance at the National Association of Farm Broadcasters convention in Kansas City, Vilsack announced the agency's intention to purchase $82.6 million in pork, cherry, plum and apple products for federal food nutrition assistance programs."Today's actions will help stabilize prices and markets, stimulate the economy, and provide high-quality food to Americans in need of USDA's nutrition assistance programs," Vilsack said in a news release. The USDA intends to purchase $50 million in pork, $12 million in tart cherries, $1.8 million in dried plums and $18.6 million in apples and apple products.The purchases support the school lunch and breakfast programs, the summer food service program, the Food Distribution Program on Indian Reservations, the Commodity Supplemental Food Program and The Emergency Food Assistance Program. In addition, the agency makes emergency food purchases for distribution to victims of natural disasters".

The PPP model of industrial development involves, governments participation in some form but leaves the day to day management in the hands of the private partner. In India PPP model is just being tried in several sectors and how it will shape up remains to be seen. One of the most potential areas for government support in the country is in the applied nutrition program for which a budget provision of about Rs 8000 crore has been made. It is true the government has several farmer support programs and the MSP scheme is intended to prevent distress sale of farm produce though this is limited to durable crops. With renewed emphasis on Fruit and vegetables and the operation of the Horticulture Mission, GOI may consider procuring these nutritious commodities for channeling into the mass feeding programs, benefiting both the growers and the poor beneficiaries of the program.

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