What is Gross Capital Formation

Gross capital formation (formerly gross domestic investment) consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories. Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings. Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales, and "work in progress."

This is one of the investment challenge India is facing.

NAFED(National Agriculture Co-operative Marketing Federation of India Ltd.)

This has been established in co-operative sector at national level for marketing of agriculture products.

TRIFED(Tribal Co-Operative Marketing Development Federation of India)-1987

The basic aim of TRIFED  was to save tribal from exploitation by private traders and to offer them remunerative prices for their minor forest produce & surplus agriculture products. It has been declared as an important agency for collecting ,processing, storing & developing oil seed products. TRIFED plays role of an agent of FCI for government purchase of wheat & rice .It is also an agent of agriculture and cooperation department of government  for purchase of cereals ,pulses and oil seeds.Agriculture ministry gives aid to TRIFED for compensation loss incurred due to price fluctuations.

APMC act(Agricultural Produce Marketing committee)

APMC:

The APMC Act in each state of India requires all agricultural products to be sold only in government -regulated markets. These markets impose substantial taxes on buyers, in addition to commissions and fees taken by middlemen, but typically provide little service in areas such as price discovery, grading or inspection. A key impact of this regulation is the inability of private sector processors and retailers to integrate their enterprises directly with farmers or other sellers, eliminating middlemen in the process.Farmers also are unable to legally enter into contracts with buyers. This leaves no incentives for farmers to upgrade, and inhibits private and foreign investments in the food process sector. Centre asks states to amend APMC ActIn a move to allow farmers to directly sell their produce to industry, contract farming and setting up of competitive markets in private and cooperative sector, the Centre has asked the state government to amend the Agricultural Produce Marketing Act.Under the present Act, the processing industry cannot buy directly from farmers. The farmer is also restricted from entering into direct contract with any manufacturer because the produce is required to be channelized through regulated markets. These restrictions are acting as a disincentive to farmers, trade and industries.The government has recently approved a central sector scheme titled ³Development/strengthening of agricultural marketing infrastructure, grading and standardization ´Under the scheme, credit linked investment subsidy shall be provided on the capital cost of general or commodity specific infrastructure for marketing of agricultural commodities and for strengthening and modernization of existing agricultural markets, wholesale, rural periodic or in tribal areas.The scheme is linked to reforms in state law dealing with agricultural markets (APMC Act). Assistance under the new scheme will be provided in those states that amend the APMC Act.The Centre has asked the state governments to inform as to whether necessary amendments to the APMC Act have been carried out, in order to notify the reforming states for applicability of the scheme. Along with the Centre, the industry is also interested in the amendment to the APMC Act as it restricts the growth of trade in agricultural commodities.³The policy regime pertaining to internal trade is particularly restrictive. The agricultural sector continues to be hamstrung by a plethora of controls, which were introduced during the era of shortages,´ said the PHDCCI.Meanwhile, a decentralised system of procuring wheat and rice would make the Public Distribution System more cost effective, the government has said.