Brilliant idea, I say!

For all the buzz about India's economic progress, the fact of the matter is that a large majority of the population lives in poverty. Government policies and schemes in this regard have been outright populist and hardly visionary at all.

I remember a conversation I once had with an IIM Kolkata professor about entrepreneurship. And the talk turned to how the economic changes could be made more broad-based. And he said, I had a very conservative outlook on agriculture, but have come around to the view that the only way out is for the privatisation of agriculture. Given that over 60% of the population still depends on agriculture for its main source of income, any reforms are going to be very narrow unless they begin to address agricultural reform. One of the problems he mentioned was that it was very difficult to privatize farming in the current situation. Even when the government provides subsidies for something as simple as pumps, the fact that landholdings are so small and often non-contiguous means that a farmer cannot even take advantage of a pump, since he may not have the one acre of contiguous arable land that would make the use of a pump feasible. Privatization would mean, collective farming, pooling together of resources, availability of capital, and introduction of modern farming methods.

But after 50 years of Nehruvian socialism, and inspite of the past few years of reform, the idea that agriculture should or can be privatized would create a furore, raising visions of behemoths such as Cargill swallowing land and resources and pumping billions of dollars out of the country.

In such a scenario, comes Mukesh Ambani's refreshing ideas on what his vision for the country is. Read this excellent write up at Newsweek:

"Ambani plans to invest $5 billion by 2011 to put both the farms and the stores on the road to modernity, connect them through a distribution system guided by the latest logistics technology, and create enough of a surplus to generate $20 billion in agricultural exports annually."

Read also, Atanu Dey's comments at the Indian Economy Blog. If Ambani can pull this off, he will cement his place in the Hall of Fame of legendary businessmen, and free up the immense potential in the farming and retail sectors in a potential market of 1 billion people. And hopefully then, India will truly be shining.