A REPORT ON

GLOBAL CHALLENGES FOR INDIA

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF SEMINAR ON CONTEMPORARY MANAGEMENT ISSUES (PAPER NO. M 207) OF THE DEGREE COURSE OF RAJASTHAN TECHNICAL UNIVERSITY, KOTA

Faculty supervisor: Mr. Adarsh kumar pandey

Submitted by: Lalit Sharma MBA 2nd

SEM. SWAMI KESHVANAND INSTITUTE OF TECHNOLOGY MANAGEMENT & GRAMOTHAN, RAMNAGARIA, JAIPUR

Declaration

I , the undersigned Lalit Sharma, a student of MBA 2nd Semester of Swami Keshvanand Institute of Technology Management & Gramothan, Ramnagaria Jaipur declare that the SCMI Work presented in this report is my own work. This work has not been submitted to any other university for any other examination.

ACKNOWLEDGMENT
I wish to thank GOD the Almighty for bestowing on me his blessings and for giving me the opportunity to undergo the project with this prestigious organization. He has given me good sense and understanding which has helped me in doing my work with at most dedication and hard work. I express my sincere thanks to all of my Faculties of SKIT, Jaipur for guiding me right form the inception till the successful completion of the project. I sincerely acknowledge them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he had provided to me with all stages of this project. I wish my sincere thanks to Mr.Adarsh Kumar Pandey who provide his valuable time from their busy schedule.

LALIT SHARMA MBA 2nd Semester

TABLE OF CONTENTS
Global Challenges for India a. Poverty b. Inflation c. Inequality d. Climate Change e. Rising commodity Prices, Threat to Global Economic Development f. Trade, key to lower food prices g. Agflation in the Global Economy h. Trends in Demand for and supply of food grains 2. Conclusion 3. Bibliography

GLOBAL CHALLENGES FOR INDIA

The modern day global economy is a highly interconnected one. With the increased connectivity the challenges before the global economy has achieved an altogether new dimension. On one hand is the positive impact of instant access to the global information network. On the other hand, market volatility is using the economic inter linkage channels to spread like wildfire. The global economic challenges come from a host of factors. They include topics like poverty eradication, role of international bodies, containment of inflation, ways for controlling rising food prices, demand and supply trends in the world's food grains markets, factors impeding the global economic development, issues related to world trade and agflation to name a few. 2008 has began on a relatively sombre note as compared to 2007. The International Monetary Fund revised down the estimated world growth rate for 2008. This was a fall out of the US sub prime crisis. At present economies through out the world are facing stock market volatility and rising unemployment figures as an after effect of the US crisis. It seems that the world is headed towards a recession. Since globalization has done away with the insulation of markets, various market risks are getting magnified. The world is yet to do away with the scourge of infant mortality, income inequality and poverty. Poverty y is basically a lack of entitlement to the basic needs of human sustenance.

As per estimates, around one billion people worldwide survive on less than a dollar per day. Over one billion do not have access to clean water. Basic sanitation facilities are absent for around 2.4 billion people. Around 5 million children worldwide die from starvation. Life expectancy of the African populace is around 35 years less than their US counterparts. As per data released by UNICEF around 10 million children who were less than 5 years of age died world wide in 2006. Of them around 4 million were infants. To sum up, the challenges before the global economy are by no means simple. Timely intervention in the form of appropriate policies and fiscal help from the world bodies are needed to tide over the crisis. No less important is the political will needed for the seamless implementation of the policies.

CHALLENGES FOR INDIAN ECONOMY

Poverty Inflation Inequality Climate Change Rising commodity Prices, Threat to Global Economic Development Trade, key to lower food prices Agflation in the Global Economy Trends in Demand for and supply of food grains

POVERTY IN GLOBAL CONTEXT

The problem of poverty has crippled the world economic development from time to time. Poverty is visible in all the corners of the world; though, its severity varies. It is more prominent in the developing and less developed economies, while; the incidence of poverty is less common in the highly industrialized nations and OECD countries like the United Kingdom and the United States. The effects of poverty are particularly severe for sub-Saharan Africa.

CONCEPTS OF POVERTY
The concept of poverty line is crucial in the context of poverty. It describes the minimum income level required to maintain a decent standard of living. The absolute poverty measures point to the total number of people living below the poverty line. These measures

focus on the individual's capacity to consume and are independent of the income distribution change. The concept of relative poverty is more or less like a measure of income inequality. If there is less disparity in the distribution of income in a particular economy, the relative poverty is bound to be low. Poverty Line at a Glance The definition of poverty line has been changed from time to time. As per the World Bank definition set in 1990, $1-a-day defines the international poverty line after adjusting for different measures of purchasing parities. Individuals earning less than this level are considered to be extremely poor. It is the most widely used measure of absolute poverty line. The absolute poverty line fixed by the World Bank is bit higher for the industrialized nations. Here, the level is $14.40-a-day. This poverty line is adjusted for the standards of living across the developing and industrialized nations. However, some of the leading economies of the world (like US) fix the measures of absolute poverty line as per their discretions.

ON CYCLE OF POVERTY
The Cycle of Poverty is another important term in the context of poverty. It describes the situation where poor people fail to get out of the poverty trap for successive generations due to lack of critical resources.

HUMAN POVERTY INDEX

Illiteracy, short life span and dearth of public and private resources are the common manifestations of poverty. HPI or Human Poverty Index developed by UNDP aims to measure the deprivations arising out of human poverty. The Human Poverty Index also describes the difference between income poverty and human poverty. The value of the index reveals the proportion of total population getting affected by the three basic poverty dimensions. The HPI is a good measure to get an idea about how deep-rooted the poverty is. Knowledge, longevity and proper standard of living are the three variables that are commonly used to measure the principal dimensions of HPI.

POVERTY IN GLOBAL CONTEXT

Sub-Saharan Africa has been witness to the most severe form of poverty. Nearly 50% of the population survives on less than $1-a-day. Malnutrition, internal conflicts, dreadful diseases like AIDS and improper governmental measures are the main reasons behind this extreme poverty. As far as poverty goes, it is the Southeast Asia that comes next to sub-Saharan Africa. The World Bank report reveals that Southeast Asia is the home to around half of the total poor population of the world. Around 85% of the total population of the region survives on below $2-a-day. The poverty situation is bit better for Eastern Asia and Pacific. Despite 50% of population living under $2-a-day, the number of poor people in this region has declined significantly in recent past. It is mainly due to the social and economic progress achieved by China over the passage of time.

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When it comes to Latin America, inequality in income distribution resulting from poverty is a matter of great concern. According to a World Bank report, nearly 48% of the total income is concentrated in the hands of wealthiest 1/10th of the population of the country; while the impoverished 1/10th section earns merely 1.6% of the total population. However, there is a ray of hope as the economy is going through a phase of rapid economic growth. In conclusion it can be said it is a great challenge to alleviate poverty. However, attempts are on to implement the cost-effective measures of poverty alleviation uniformly across the world. The welfare organizations are also playing a crucial role in this context.

INFLATION

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IMPACTS OF INFLATION
Inflation is a situation when worth of money decreases. It is caused by excess of money supply in a particular economy. Whenever, money supply exceeds the demand for money, inflation results. In simple terms, inflation corresponds to reduced purchasing power. According to Milton Friedman, inflation is essentially a monetary phenomenon. However, this is particularly true for long run inflation. The short term inflation and medium term inflation, on the other hand, depend on a variety of other factors like relative elasticities of price levels, wages and rates of interest. There are different schools of economics that come with different reasons of inflation. They can be broadly categorized into quantity theories of inflation and quality theories of inflation. The quantity theory of inflation is based on the money supply equation, whereas, quality theory of inflation has been developed on the idea of buyers' expectations of exchanging currency with desired commodity at a future date.

Categorization of Inflation
According to Keynesian economics there are two basic two basic types of inflation, Demand-Pull Inflation and Cost-Push Inflation. The concept of Demand-Pull Inflation deals with the idea that demand for goods and services in an economy is more than the supply. This excess demand pushes up the price until equilibrium is attained at a higher price level. So, inflation here is demand-driven. Now, the point that needs to be clarified here is what causes the aggregate demand to go 12

up. Increase in government expenditures, increase in supply of money and increase in the price level in other parts of the world are three primary factors that cause the aggregate demand to go up. Cost-Push Inflation results from a decline in aggregate supply. Rise in prices of raw materials and wage rates are two major factors behind Cost-Push Inflation. However, it may result from increase in prices of any of the factors like land, labor, capital and organization that are involved in production. When there is an increase in cost of production or operation, the profit margin of the entrepreneurs decreases. The increased operational costs are transferred to the customers in the form of higher prices. This results in Cost-Push Inflation. According to the monetarist economists, money supply is the key factor behind inflation. If the central banks fail to control money supply properly, the rate of growth of money supply may exceed the growth rate of potential output that is the real GDP. This causes the price level to go up, resulting in inflation.

Impacts of Inflation
A small increase in price level is considered to be beneficial for the economy. Inflation generally increases the price level gradually over time. When price starts increasing, the consumers may opt for making purchases at present time, out of the fear of further increase in price level in future. This tendency of the buyers increases the spending and borrowing activities in the short term period. It provides additional mobility to the economic performance of the economy.

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Inflation can have severe impact on the retired people who live on a fixed source of income. As price level keeps on increasing, the worth of their savings decreases and they find it really difficult to maintain their livelihood. If the imbalance between demand and supply and the resulting inflation go beyond the control of the government, both the producers and buyers get adversely affected. The buyers cut down their day-to-day expenditures to cope with the increasing price level. The producers on the other hand, reduces their output levels to retain the minimum profit margin.

Inflation, the Challenge before Global Economy

Considering the failure of US sub prime market and the subsequent recession in US economy, controlling the increasing rate of inflation is the greatest challenge that the world is confronting for some time now. The Indian and Chinese governments are taking care of the inflationary situations very seriously. In Europe, interest rates have been maintained at higher side to keep inflation under control. Fiscal policy measures like reducing government expenditure and increasing rate of taxation can also be used to check inflation. Attempts are on to bring about regulatory changes to face the challenge of inflation.

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Effects of Economic Inequality

Inequality in the parlance of Economics is generally understood as a lack of parity in the entitlement to resources and income among all economic agents. Economic inequality is seen to exist in the developed and developing nations, across different income groups of a country's population and among different races to name a few. There are various measures of economic inequality available, prominent among them is the Gini Coefficient. The effects of economic inequality among the world populace cover a wide spectrum. The era of globalization and interconnectivity has added a new dimension to the whole process.

Gini Coefficient: A Measure of Income Inequality

Gini coefficient is a statistical measure, which is used for the measurement of income inequality across nations. It is a number, which ranges from 0 to 1. In this measurement perfect equality is depicted by 0. It is a situation, where everybody possess the same income. Perfect inequality in income distribution is said to exist when the Gini coefficient is 1. This refers to a situation where a single person commands the entire income of a country and the rest have absolutely zero income. Economic inequality measures, which are used for making 'inter-country comparisons' of incomes of individual entities need to take proper account of the country-specific factors so as to get accurate results.

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Gist of IMF Report on Globalization and Inequality

Globalization is considered by many to be the main cause behind the perpetration of an increased income inequality in wide areas of the globe. As per the reports from International Monetary Fund technological advancements have indeed led to an increase in global income inequality. The other contributing factors have been an increased financial globalization and FDI or foreign direct investments. However, an increased trade globalization has only worked towards the eradication of this inequality.The need of the hour is policies, which will ensure that the proceeds from technological innovation and globalization are distributed among the cross section of a country's population. Emphasis is to be laid on measures for improving the human capital base of an economy. This can be done through the provision of quality education for all. The modern day world economy is a knowledge-based one. Governments of countries need to promote policies, which would safeguard the financial interests of the poor in a globalized market. Developing countries are primarily agriculture based and they can promote agricultural exports for reaping the benefits of trade liberalization .

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Factors Causing Inequality

The factors responsible for causing inequality in an economy are usually interrelated. They can be grouped under the heads of labor market, development patterns, innate ability, wealth condensation, education, risk taking behavior, labor -leisure preference, gender and culture to name a few. Modern day labor markets are characterized by the free play of market forces. It has been observed in the developing economies that for unskilled jobs the supply of labors far outstrips the demand for the same. This leads to a low wage for the workers. The situation may be completely opposite in the market for skilled labors. Thus there exists a wage differential or inequality among different sectors of an economy. However, wage differentials on a global scale is affected by a complex set of factors, one being the present day concept of outsourcing. Wealth condensation is another factor, which may give rise to inequality. Put simply it means the rich only gets richer. A minority of a country's population is seen to possess the majority of its wealth. The person with a higher income and wealth displays a higher marginal propensity to save as compared to one with a low asset base. This saving is then turned into investment. Wealth begets more wealth but only for the lucky few. Disparities in entitlement to productive resources more often than not lead to the persistence of huge income inequalities in developing nations. The phenomenon of wealth condensation also leads to an intergenerational inequality. In simple terms offspring of wealthy individuals get a head start in life while those belonging

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to less fortunate parents need to depend primarily on their innate ability and available social security.

CLIMATE CHANGE
Climate change describes a long term variation in the climatic conditions not excluding precipitation and average temperature. Natural internal processes may result in climate change. It may be the outcome of external influences. Consistent anthropogenic variations in atmospheric compositions and improper use of land are the other factors that cause climate change. The greenhouse effect is crucial in this context. The effects of global warming are evident from the increase in ocean temperature, rise in sea level and melting down of icebergs. There has also been an increase in the average temperature of air. The climate change with all its adverse effects is indeed one of the biggest social and environmental challenges before the global economy.

Causes of Climate Change: An Overview

The problem of climate change has gained substantial importance over the last two decades. The atmosphere surrounding the planet has changed so rapidly that living beings including animals and plants are finding it very difficult to cope with the changing atmospheric scenario.

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Among the several natural factors that cause climate change, ocean currents, continental drift, meteorites and comets, volcanoes and the earth's tilts are worth mentioning. Apart from these natural factors, human causes also play a major role in influencing the climatic pattern of the planet. Excessive use of fossil fuels, urbanization, industrialization and deforestation all have played their roles in changing the climatic pattern of the world. The increased concentration of greenhouse gases like Carbon dioxide and Methane in the atmosphere have major impacts on climate change.

Climate Change: Our Contributions

The changing life style of urban population contributes significantly to the climate change. Electricity has been an integral part of our day-to-day life. The thermal power plants make use of fossil fuels for power generation. These power plants emit large amount of pollutants and various greenhouse gases; thereby aggravating the problem of climatic change. The fossil fuels used for running buses, cars and other means of transport have major impacts on climate change. The plastic wastes generated from different sources also have major contributions in changing the climatic pattern of the world. The use of high-yielding seeds has increased the requirements of fertilizers and pesticides. This in turn results in emission of more and more nitrous oxide and other pollutants. These

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fertilizers also cause major damage to the water bodies nearby when they get mixed up with the water due to rain or some other reason.

How to Fight Climate Change

Environmentalists all over the world are trying their best to protect the planet from the adverse effects of climate change. The European Union has played a crucial role in these movements. The Kyoto Protocol in 1997 and United Nations Framework Convention on Climate Change in 1992 are the two important treaties that are aimed to deal the issues regarding climate change. The primary objective of the Convention has been to urge the developed nations to check the emission of greenhouse gas. The Kyoto Protocol followed the trends set by the Convention. The Protocol is regarded as the most significant agreement on environmental issue implemented so far. The target regarding greenhouse gas emission that has been set in Kyoto Protocol needs to be achieved within the period of 2008-2012. The European Climate Change Program or ECCP in another major initiative towards environment protection. This program introduced an array of measures and environment policies to address the issue of climate change. The EU Emissions Trading Scheme has been the basis of the European Union's initiatives to check the emission of greenhouse gas. However, to control the emission of greenhouse gas it is necessary to create general awareness among the common people. Substantial change in energy system, use of environment-friendly technologies in production, alternative energy efficient fuels,

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minimum use of fossil fuels and change in the pattern of living are the key factors that can bring about positive changes in environment.

Rising commodity Prices - Threat to Global Economic Development

According to World Economic Forum President Robert Zoellick, hunger and nutrition are the forgotten Millennium Development Goals. The most recent threat to the global economy is the rising food prices. The ever-expanding demand-supply gap is the contributing factor for this food price rise. In the recent times the shortage in the food supply has led to violence in many parts of the world. Pakistan has made use of troops to safeguard trucks that are carrying flour and wheat. Violent protests are also witnessed in countries like Mexico, Morocco, and Uzbekistan. This has in turn affected the normal functioning of the economy. The worst hit is the trade segment, which is the major source of revenue for these countries.

Causes And Effects Of Food Price Hike

Population did play an important role behind the rising food prices in the recent past. But the scenario has changed over the past thirty years. More than population the rise in the per capita income has fuelled demand, thereby creating the demand supply gap. Particularly, India and China have raised the demand for grains, dairy products and meat, the world over. Huge subsidies that are injected for the production of biofuels have happened at the cost of land taken away from food production. This again has widened the demand supply

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gap. The ethanol production in the United States is likely to replace the production of corn by 30% leading to a hike in the world corn prices. Measures have been taken by different countries to combat the rising food prices. Price controls and export quotas are imposed on basic food production. Other tools such as subsidies and regulations are undertaken to prevent the rising food prices. Such restrictions have, on the contrary, increased, rather than dampen, the food price hike. Farmers have moved from producing such crops to more profitable business lines. Although subsidies increase production but distorts the allocation of resources. The less developed countries are the worst hit on the face of rising food prices since a significant portion of their income is siphoned off for food consumption. For rich countries like the United States food consumes 10% of the income, whereas for countries like Afghanistan, about 60% of the income is absorbed for the consumption of food.

World Food Program On The Skyrocketing Prices Of Food

According to the World Food Program, another factor that has contributed to the rise in the food prices is the rise in the oil prices. Climate is also held as a factor. Another view is that the urban poor will be affected the most due to this rising food prices. In most of the sub Saharan country, the common trend is that the farmers leave their land and head to other lines of production in the urban areas.

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According to the World Food Program, the countries that are most affected are Eritrea, Gambia, Togo, Cameroon, Niger, Senegal, Zimbabwe, Haiti, Myanmar, Yemen, Cuba etc.

FAO On Food Scarcity

According to the UN Food and Agriculture Association (FAO) about 36 countries would need external food aid for their rising food prices. In March, food aid package worth $243 million was dispersed to Africa, Asian and Middle East countries by the European Union. There are some developing countries, which have preferred the import of food rather than producing themselves. The economic growth of both India and China has raised the demand for meat and dairy products that requiring land, eight times more than that required producing vegetables or other staple food. It is estimated that there will be a further rise in the demand for food by 60% in 2030, the world over.

Implications Of The Rise In Food Prices On The Banking Sector

With the rise in he food prices, the banks in the counties like Britain, Mexico, South Africa and Chile have increased their lending rates. Several monetary policies are undertaken to curb inflation whose major contributing factor is the rise in the food prices.

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Hence we may conclude that the main reason behind the rise in the food prices is the rise in the per capita income and rising demand of countries like India and China. There has been an increasing reallocation of land for the production of ethanol, which has acted as major bottleneck in the production of basic food. The worst hit are the developing countries, which spend a significant proportion of the income on the consumption of food. This rise in the food price has contributed to the general rise in prices or inflation. Several monetary policies are undertaken to deal with the same.

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Boost Trade In Agricultural Commodities

Opening up of economy or trade liberalization can help to reduce food prices. In the words of the World Bank President, Robert B. Zoellick, A fairer and more open trading system would encourage the developing country farmers to expand production. It is high time that subsidies, that have distorted agricultural prices, should be put to a halt. The doors of trade must be opened and food imports should be encouraged so as to ease out the financial anxiety of the country. Trade restrictions that exist within a country have also caused the soaring food prices. Due to lack of commodity movement across the states, expenditure driven growth has contributed more to inflation.

Uruguay Round To Boost Trade In Agricultural Commodities

In the Uruguay Round, trade in agricultural commodities was agreed upon in the General Agreement on Tariff and Trade. The countries, which are part of this contract, signed in the Agreement on Agriculture (AoA) to decide on the limits of trade liberalization. The countries finally came to the concept of managed trade rather than free trade to operate amongst them.

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According to the group of Net Food Importing Developing Countries, there are negative consequences of such partial negotiations. It is expected that the world food price will shoot up due to this. There will also be a fall in the food aid to the food exporting countries. To counteract such effects the Special Ministerial Decision was formed in Marrakesh. This was aimed t compensating the developing countries if they suffered any losses owing to rise in food prices or fall in food aid. According to an estimate made by FAO the food bill of the low-income food deficit countries will soar up by $10bn. 14% responsibility of this rise lie with the trade agreements that took place in the Uruguay Round.

Trade Policies Taken To Lower Food Prices

Different countries have adopted different measures of trade in order to deal with the escalating food prices.Saudi Arabia has resorted to import tax cuts on wheat from 25% to zero. Tariff is also decreased for dairy products, vegetable oil and poultry. India slashed its tariffs on maize and edible oils. Export f of rice was also stopped leaving out the high value basmati. Hence we see that there is shift in policy of the government to protect its farmers from a ruse in import tariffs to consumers who are bearing the burden of high food prices. According to the Indian trade Minister Kamal Nath, food shortage is the most pressing problem of today. This is clearly reflected from the position of India that had attained elf sufficiency in food grains in the 1970s. For the last 2-3years India has to fill the demand supply mismatch in food through imports. There are high exporting countries like Ukraine, which are also imposing export restrictions on its food products.

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The world price of rice has increased three times. Similar is he case with soybeans, which has stimulated protests in countries like Indonesia.

AGFLATION IN THE GLOBAL ECONOMY

The persistent rise in world agricultural prices, which is a major contributing factor in inflation, is known as Agflation. The period 1974-2005 witnessed a continual fall in agricultural prices. World food prices have risen by 75%. Agricultural production is subject to the vagaries of nature and hence is highly fluctuating. Agricultural prices follow suit where over production may lead to a drop in the prices and the vice versa is true.

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Factors Behind Agflation

The last three decades have witnessed a downward trend in the agricultural prices. It is important to study the factors that triggered the reverse trend. Structural changes within an economy are an important reason behind Agflation. There is a rise in per capita income in the populated countries like India and China. Consumption of food grains as feedstock has also increased. Previously, with the fall in the grain prices, many farmers had shifted their production lines to more profitable ones. The present rise in the demand could not match the supply side, which has triggered price. According to the International Grain Council, the world grain production would reach 1660m tones in 2008, which exceeds the previous year by 90m tones. Even then demand is likely to outdo supply. With the rise in the grain price, the price of all the food items that use grain as an input would rise. With the rise in the cost of maintaining poultry, the cost of egg or chicken also rises. Another important factor causing Agflation is the rise in the price of oil. Due to this other alternative energy resources are ventured forth like bio fuels. Ethanol is on the cards that use sugarcane and corn. This in turn has led to the rise in the demand for corn and sugarcane. In comparison to the year 2000, corn about three times more in volume is required to produce ethanol in America. Since the production of corn and sugarcane is profitable, farmers have shifted their production lines from grain. This again has increased

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the price of food grains. Although technological changes can take care of the supply bottlenecks, it is a lagged process.

Agflation As A Global Problem

Inflation in the agricultural sector can be attributed mostly to crops like coffee, corn, wheat, and soybeans, sugar, cocoa and meat and poultry products. The 7.1% inflation rate in China is due to the rising food prices. There are idiosyncratic factors such as consumption baskets, monetary policies etc may dampen or fuel Agflation. The phenomenon of Agflation poses a serious threat for developing economies rather than the developed ones. This is because food carries 14% weightage in the Consumer Price Index of America. The figure is 33% and 46% in the case of China and India respectively. For the poor countries an increase in the food prices would have greater contribution on inflation rather than the rich ones.

Trends In The Demand And Supply Of Food Grains

In this paper we will focus on the past demand and supply of food gains and then move onto the forecasted demand and supply of food grains. Past Trend In The Demand And Supply Of Food Grains The population pressure in the 1950s was not very high. Although agricultural production was volatile during the mentioned period, taking a 5-year moving average reveals that the

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world supply of food grains far outdid its demand. There were two periods of time where there was a fall in the per capita production of food grains and that was in the 1960s. The five-year moving average reached its height in 1984, i.e. 371kgs and fell subsequently in the 1990s to 350kg. It is seen that from 1984 the worlds population has overshot the production of food grains. This is owing to the demographic growth that is taking place in parts of the world that previously suffered from a low per capita income. A better picture of the production situation can be obtained if we analyze it at the country level. The Sub- Saharan African countries have shown a poor performance in terms of production of food grains. Some of the factors that are responsible for such low production are less attention on the part of the government to this sector, political instability and many more. Climatic factors also contributed to the agricultural variability. These countries were also bereft of technological innovations. For the Middle East countries volatility in agricultural production was so high that from 1984 no particular trend can be arrived at. For the South Asian countries like India, Pakistan and Bangladesh, the trend is contributed by India, which is the most populous of the three. Although production was hampered by the droughts in the mid 60s and early 70s, no major crisis was witnessed in the production of food grains. Hence we may conclude from the above that the world production of food grains has declined over the years, wherein the demand has outstripped the supply.

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Forecast Of Future Demand And Supply Of Food Grains

It is estimated that the world population will rise by 800 million per decade till 2025. The production of food grains is expected to rise to 2.67 billion by 2025 so as match the demand level. It is also estimated that there will be a regional mismatch in the demand of food grains across different regions.

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CONCLUSION
The collection of my report shows the different challenges and problem facing by our country i.e. problem of poverty, inflation, price-rise, agflation, sudden climatic change etc. by prepare report on this I estimate that by 2020we have to work more to improve and become a developed country from developing country. According to a recent Indian government committee constituted to estimate poverty, nearly 38% of Indias population (380 million) is poor. The inflation rate in India was last reported at 8.8 percent in February of 2012. Rising food prices have been one of the key reasons why inflation in India is now amongst the highest in the world - on some estimates, food prices account for half of the acceleration in consumer price inflation posing a policy dilemma for the Indian central bank. In climate change reason is the fossil fuels used or running buses, cars and other means of transport have major impacts on climate change In inequality governments of countries need to promote policies, which would safeguard the financial interests of the poor in a globalized market. Developing countries are primarily agriculture based and they can promote agricultural exports for repaying the benefits of trade liberalization.

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BIBLIOGRAPHY

Books: Ray Wright, Consumer behavior,2004 Mark Gabbott and Gillian Hogg, Consumer and Services,2005 Panda.H,The Complete Technology Book On Snack Foods,1999. Kothari,C.R,Research Methodology, New Age International(p)ltd 1994. Kotler,Philip,Marketing management, Person Eduction.Inc,2005. Philip kotler,Marketing strategies,penguin books

Websites www.wikipedia.com www.google.com www.globalindia.com

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