earlier periods. the policy will continue to address the prevalent issues of containing the inflation expectations and sustaining the growth prospects. medium - term prospects for a large and diverse economy with a low per capita income that is undergoing structural transformation in a highly uncertain global environment, challenges for public policy are manifold. i would focus on a few, which we in the rbi consider to be crucial for enhancing medium term prospects for equitable growth. first, while over 60 per cent of the workforce is dependent on agriculture, the sector accounts for less than 20 per cent of the gdp. further, the gdp growth generated from agriculture is only marginally above the rate of growth of the population, which is not adequate to ensure rapid poverty reduction. volatility in agricultural production has not only implications for overall growth but also, as the recent experience has amply demonstrated, for maintaining low and stable inflation. enhanced growth of the agricultural sector is vital for ensuring food security, poverty alleviation, price stability, overall inclusive growth and sustainability of growth of the overall economy. recently, our honourable prime minister announced a major scheme to double the growth rate of agriculture to 4. 0 per cent over the 11th plan period. a time - bound food security mission was also announced to counter rising prices of food products and to ensure visible changes in their availability over three years. second, the inadequate availability of modern infrastructure and shortage of skilled manpower are the most critical barriers to the growth of the manufacturing sector. it is essential to augment the existing infrastructure facilities, particularly roads, ports and power, to provide the enabling environment for industry to prosper. the most important issues here are regulatory framework and overall investment climate, which are being addressed by the government. one other concern has been the cost recovery, which is expected to improve with enlightened public - private partnership. india has the design, construction, technological, organisational and financial capabilities domestically to bring about efficient and prompt improvements in physical infrastructure to meet the emerging demand pressures. third, a salient feature of the fiscal consolidation process in recent years, even after accounting for cyclical elements, has been significant reduction in the key deficit indicators. our studies on state finances in the rbi give grounds for optimism in regard to their fiscal health. in fact, some state governments are buying back their debt from the market and a few others are reducing their planned market borrowings. we recognize two important areas that, if addressed, would result in fiscal empowerment both at the centre and the states. one is

deepali pant joshi : fortifying cooperatives – efforts to strengthen the short term cooperative credit structure speech by dr deepali pant joshi, executive director of the reserve bank of india, at the orientation programme on investment in government securities, organized for state / central cooperative banks in maharashtra, mumbai, 28 october 2014. * * * ladies and gentlemen! 1. i am very happy to be here today to share with you the present status of cooperatives in general and the role of rural cooperative banks as an institution, in particular. i feel honoured to be here with you all and inaugurate this orientation programme on investment in government securities. let me, at the outset, convey my thanks to the regional director for maharashtra and goa for inviting me to speak on this important occasion. 2. the three tier short term cooperative credit structure ( stccs ) consists of about 92, 000 primary agricultural credit societies, ( pacs ), 371 district central cooperative banks ( dccbs ) with 13, 000 branches and 32 state cooperative banks with more than 1000 branches. they have tremendous penetrative network and presence in small towns and villages across the length and breadth of this country. they primarily cater to the credit needs of small / marginal farmers and rural artisans. the contribution of cooperatives helps the rural people in a major way to keep away from informal sources of finance. if the inherent strength of cooperatives is realized, they are here to play a meaningful and sustained role in rural development. against this background, let us discuss some of the emerging challenges and the role of cooperatives in today ’ s circumstances. why are the cooperatives lagging? 3. there are few issues affecting the performance of cooperatives in the country calling into question their viability and sustainability. i will briefly cover the more important ones. ( i ) falling share of agriculture credit the share of stccs which once played a major role in the growth of agriculture by supporting small and marginal farmers is steadily declining. until the early 1990s, cooperatives provided almost 62 per cent of the agricultural credit in the country, but over the years, their share has declined, going down to 16 per cent by 2010 – 11. ( ii ) weak financials mounting losses, growing npas and poor resource base are factors contributing to the decline in the performance of the cooperatives at the grass - root level. the institutions at the lower / middle level mostly depend on the higher agencies for financial support, i. e.