“Evaluate the role of supply-side factors such as agricultural productivity, infrastructure bottlenecks, and logistics in contributing to inflationary pressures in India. What policy measures can be adopted to address these supply-side constraints?”
Agroforestry holds significant potential for sustainable agricultural development in India, offering a range of ecological, economic, and social benefits: Ecological Benefits: Soil Health Improvement: Trees in agroforestry systems help prevent soil erosion, improve soil structure, and enhance nutrieRead more
Agroforestry holds significant potential for sustainable agricultural development in India, offering a range of ecological, economic, and social benefits:
- Ecological Benefits:
- Soil Health Improvement: Trees in agroforestry systems help prevent soil erosion, improve soil structure, and enhance nutrient cycling through leaf litter decomposition.
- Biodiversity Conservation: Agroforestry promotes biodiversity by providing habitats for wildlife, insects, and beneficial organisms, contributing to ecosystem resilience.
- Climate Resilience: Tree cover in agroforestry systems mitigates climate change impacts by sequestering carbon dioxide, reducing greenhouse gas emissions, and moderating microclimates.
- Economic Benefits:
- Diversified Income: Agroforestry diversifies farmers’ income sources through additional products such as fruits, nuts, timber, and medicinal plants, reducing dependency on a single crop.
- Improved Yield Stability: Trees provide shade and wind protection, reducing crop stress and enhancing overall yield stability.
- Cost Savings: Trees contribute to natural pest and disease management, reducing the need for chemical inputs and associated costs.
- Social Benefits:
- Livelihood Security: Agroforestry enhances food and economic security for farmers, particularly in marginal and rainfed areas, by providing sustainable livelihood options.
- Community Development: Agroforestry fosters community cohesion through shared management of resources and knowledge exchange among farmers.
- Health and Nutrition: Tree products such as fruits and nuts improve dietary diversity and nutrition outcomes, especially in rural areas.
In conclusion, agroforestry offers a holistic approach to sustainable agriculture in India by integrating trees with crops, ensuring environmental conservation, economic viability, and social well-being for farming communities. Its promotion and adoption can contribute significantly to achieving long-term agricultural sustainability goals in the country.
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It indeed heavily impacted Indian banks' capital adequacy and risk management after introducing Basel III norms. These new standards arising out of the global financial crisis of 2008 require higher capital requirements and improved liquidity standards in terms of building up resilience for the bankRead more
It indeed heavily impacted Indian banks’ capital adequacy and risk management after introducing Basel III norms. These new standards arising out of the global financial crisis of 2008 require higher capital requirements and improved liquidity standards in terms of building up resilience for the banking sector.
The above factor forced Indian banks to raise their capital adequacy ratios: there is an increasing equity or, more often, retained earnings, which can afford shocks much better now. Nevertheless, this has brought along certain challenges that cannot be managed by smaller banks in attracting sufficient capital.
The stricter norms for capital affected the lending practices, as the banks became more risk averse, particularly in the riskier sectors. To an extent, Basel III has permitted sustaining a higher proportion of Tier-1 capital and thus encouraged banks to be quality-specific rather than quantity-specific in lending, that is, secured loans instead of unsecured ones. Hence, though improving the quality of assets, credit growth has become slow-affecting the sectors highly bank-financed most.
On these lines, profitability has also been dealt with because larger capital is required to be deployed reduce leverage and hence the return on equity of banks. The increased focus on liquidity and risk management have also seen operational costs increase. Although, Basel III had the benign effect of stability in the Indian banking sector, it involved the cost of restricted profitability and a more conservative approach towards lending.
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