High inflation result of wrong policies


Tall promise of providing farm credit at 7% in last year’s Budget stayed a pipe-dream, writes Narendra Modi

The Union Budget for 2007-08, including the Railway Budget, has failed miserably in providing the necessary impact for growth initiatives to the economy.

It is often stated that India lives in villages. More than 60% of the common man earns their livelihood in rural India, but their share in the nation’s GDP is less than 20%. Therefore, the first and foremost task for the Union finance minister should have been to suggest measures for improving agriculture productivity for food grains, pulses and oil-seeds; so as to raise the farm income by introducing better irrigation system like drip and sprinkler irrigation, introduction of bio-technology, application of better farm techniques, including better seeds and organic farming. However, this Budget has failed to address these vital issues effectively, as the provisions suggested are more of token nature and insufficient to meet the country’s demand.

The Indian agriculture sector is facing a serious crisis. As per the Economic Survey, growth in agriculture sector during 10th Plan will be only 2.3%, against the target of 4%. The tall promise of providing farm credit at 7% in last year’s Budget has remained a pipe-dream. This is proved by the fact that there have been more than 10,000 suicides by farmers in the last few years. What is more painful to note is that many of the suicides have taken place in more developed states like Maharashtra, Andhra Pradesh and Karnataka. In the last few years of the UPA regime, farmers have suffered the most.

The second priority for the economy, according to me, is to ensure growth without inflation or growth without tears for the common man. The NDA government had taken the economy on take-off stage, without high inflation. However, under the UPA government, the overall growth target of 10th Plan of achieving 8% of GDP is unlikely to be achieved by the country. On the other hand, due to various wrong policies of the UPA government, the monster of inflation is raising its head, with inflation rate surging to more than 6 to 7%, affecting the lives of the common man.

The Central Budget has claimed higher resource mobilisation through service tax, excise and customs. However, these three taxes are either directly or indirectly passed on to the common man. The finance minister has given tax reduction for ‘‘cat and dog pet-food’’ by lowering custom duty from 30% to 20%. However, he has not shown any compassion for the common man and his articles of daily necessities.

MAT has been extended to companies, availing benefits under S.10A & 10B of the I-T Act for Infrastructure projects, which will be counter-productive for infrastructure development. While providing special funds for history and culture on 150th year of Independence, Sardar Patel’s contribution is forgotten, which is regrettable.

Our third top-most priority is to build excellent infrastructure in terms of power, road, port, air-port, railway, irrigation, etc. The golden quadrilateral road project was started by the NDA government and it was to be completed in 2003, but under the UPA government, it is still incomplete. Similarly, the east-west, north-south corridor road project is way behind its target, because of poor monitoring under the UPA government. In the power sector, the performance of the UPA government in the last few years has been very dismal in terms of achieving targets for generation of thermal, hydro and atomic power, because of which the country faces huge short-fall of peak load power.

In the sector of port development, instead of encouraging mari-time States, like Gujarat, to undertake nation building activity, through port connectivity, the railways have shown utter neglect in providing railway linkage. Thus, the UPA government has missed the bus in taking a major leap forward in the infrastructure sector, which could have provided a solid base for rapid growth in the first decade of 21st century.

The writer is chief minister of Gujarat

Farmer suicides haunt west India despite government relief promises

P. Sainath.
Xinhua, Feb 28 2007
In the first month of this year 62 farmers committed suicide in Vidharbha, a cotton-growing belt in west India, but the tragic figure was considered a positive sign as the monthly suicide rate finally dropped below 100 for the first time since last July.
According to the state government, 1,452 farmers killed themselves in this region last year. Many did it because of failure of crops and unbearable debts.
There was a popular comment among local farmer activists: “If I were given a choice, I would like to be born as a European cow, but certainly not as an Indian farmer, in my next birth.”
In Europe a cow gets two U.S. dollars as subsidy per day while here a farmer could be a debtor all his life. After his death, his son might inherit his debts and has to borrow money for his funeral.
According to a report from the Planning Commission of Indian government, the cost to produce a quintal of cotton stands at 2, 215 rupees (49 U.S. dollars) but the minimum support price offered by the government remains 1,960 rupees (43 U.S. dollars).
Some blamed the failure of their crops to the genetic modified Bt cotton which was promoted by the government.
“The low yield is because of the genuine Bt. Cotton, which is highly uneconomic and known to fail in rain-fed farming,” said Ramashankar Tiwari, a farm activist in Vidarbha.
The agriculture authorities blamed the low yield of cotton to spurious Bt cotton seeds but Tiwari said there has been few spurious cotton seed in the market since U.S. bio-agriculture giant Monsanto lowered the price from 1,780 rupees (39.56 U.S. dollars) per bag to 750 rupees (16.67 U.S. dollars).
Drought and lack of irrigation facilities contributed to heavy burdens upon farmers in Vidarbha. In a region that receives over 800 mm of average rainfall annually, the cultivation area totals 17 million hectares but only 3.5 percent of them has access to its 10 major, 49 medium and 650 minor irrigation schemes.
Other factors that worsen the situation are reducing price of cotton in the market and competition from cheaper cotton imported from the United States.
Insiders here said that the subsidies that U.S. government provides to its cotton growers have greatly lowered their cotton products and tiny farmers in Vidarbha have few resources to stand against it.
The cotton price dropped by 60 percent since 1995 but the U.S. subsidies to its 25,000 cotton farmers reached 3.9 billion dollars in 2001-02, doubling over that in 1992.
When a farmer in Vidarbha suffers loss in the fields and needs some cash to restart, he has few choices but private money lenders.
Nearly 73 percent of Vidarbha farmers don’t have access to institutional credit. They borrow from relatives, friends, big landlords, or the moneylenders, though Vidarbha has a good banking network consisting of 823 commercial banks, about 200 regional rural banks and close to 60 other banks.
An investigation team of the Planning Commission said in its report that nearly 2.8 million of the 3.2 million cotton farmers in Vidarbha are defaulters and for every 100 rupees (2.22 U.S. dollars) they borrow, about 80 rupees (1.78 U.S. dollars) goes into servicing of old loans.
The high farmer suicide rates have attracted lots of attention from the central government. Indian Prime Minister Manmohan Singh visited the region in July last year and promised a special relief package of 37.5 billion rupees (833 million U.S. dollars). At least 16 panels from various government departments and committees have visited the region producing quite a few reports but little visible improvement has been seen so far.
According to the Prime Minister’s relief package, 20.77 billion rupees (462 million U.S. dollars) will go to irrigation facilities but the projects have not started after six months, said Kishore Tiwari, chairman of Jan Andolan Samiti, a local farmer organization.

Maharashtra govt. accuses PMO of delay in releasing funds for farmers

Satya Prakash

New Delhi, February 28, 2007

The Maharashtra Government has accused the Prime Minister’s Office of delay in releasing additional funds for ex-gratia assistance to suicide-affected farmers’ families in the state.
Due to undue delay in release of money from the Prime Minister’s National Relief Fund for this purpose, an amount of Rs 1.80 crore had to be earmarked from the chief minister’s fund for the purpose, the Maharashtra Government said in an affidavit filed in the Supreme Court.
This component of the package authorised district collectors to sanction Rs 10,000 for a suicide-affected family for health and education related expenses, it said, adding an amount of Rs 50 lakh each was placed for disposal with the six District Collectors for this purpose in August 2006.
“This amount has fully been disbursed to the needy families and the state government has been requesting the Prime Minister’s Office for additional funds. The state government has even earmarked Rs 1.80 crore from the chief minister’s fund, with a view to keep the scheme running…otherwise the scheme had to be stopped due to delay in receiving grants from the Prime Minister’s Office,” the Maharashtra Government said in its affidavit.
The affidavit has been filed in response to a PIL by advocate Sanjiv Bhatnagar seeking review of the current agriculture policy in view of suicides committed by thousands of farmers in various parts of the country.
The court had on August 14, 2006 issued notices to the Union Agriculture Ministry and the governments of Maharashtra, Karnataka, Andhra Pradesh and Kerala on the petition that also sought modifications in the agriculture policy to check suicides by farmers.
Maharashtra also complained that NABARD has shown its unwillingness to provide loans under the Rural Infrastructure Development Fund.
On crop loan too, it said that NABARD refinance at the rate of 2.5 per cent would be available only to the tune of the total crop loan requirement and the remaining finance had to be made available by the state agencies which would put them in huge loss.
“Thus, the State Government will have to bear this financial burden of about Rs 200 crore for implementing the decision of the Government of India for providing crop loan at the rate of 7 per cent. The Government of India needs to immediately take the decision of giving 100 per cent refinance at the rate of 2.5 per cent,” the state government said.
It said that 75 per cent of the suicides in the last five years took place in Amravati, Yavatmal, Akola, Buldhana and Wasim districts of Amarawati Division and Wardha District of Nagpur Division of the state. Yavatmal district alone accounted for 27 per cent of the total suicides, it added.
On the reasons behind farmers’ suicide, the affidavit said that it “is a complex problem and need not be understood in the light of indebtedness alone, which is only one of the multiple socio-economic and psychological factors”.
Quoting from a study by Mumbai-based Indira Gandhi Institute of Development Research, it said the main reasons behind farmers’ suicide were indebtedness, crop failure and low return, illness of family members, inability to arrange finance for marriage of daughter and lack of income earning opportunities from subsidiary occupations.
However, the state government asserted that it “is wholly committed to mitigate the problem of farmers’ suicides by comprehensive, scientific and realistic policy package but said impact on the ground certainly would take some time to show.”
Quoting the data released by the government, the petitioner had pointed out that in the last five years an alarming number of 8927 farmers committed suicide in the said four states-Karnataka (5910) Andhra Pradesh (1835), Maharashtra (981) and Kerala (201).
Email Satya Prakash: satya.prakash@hindustantimes.com

Chidambaram neglects suicide belt

Sweta Ramanujan-Dixit

Mumbai, February 28, 2007
He made it a point to mention that he had devoted a generous 15 to 20 minutes of his speech to agriculture. But in those 20 minutes, Finance Minister P Chidambaram steered clear of the ‘S’ word.

In all the talk about agrarian crisis and the government’s concern about the same, suicides of thousands of cotton farmers in Maharashtra found no specific mention in the two-hour speech.

Little wonder then, that people like Kishore Tiwari of Vidarbha Jan Andolan Samiti are ‘disturbed’ after the budget. The reason: no clear-cut measures announced to stem the spate of suicides in Vidarbha — Maharashtra’s cotton belt.

“The government spoke so much about the agrarian crisis in its economic survey but the budget does not address this,” Tiwari said. Although Prime Minister Manmohan Singh announced a Rs 3,750-crore relief package in July 2006, the spate of suicides continues with 79 suicides in February alone — 12 of these in the 48 hours preceding the budget.

Tiwari felt the budget should have considered the recommendations of the National Commission on Farmers (NCF). “We have been demanding that farming be made profitable. Input and output costs should be regulated. Giving high-maintenance milch cows is like giving the farmers another reason to commit suicide,” Tiwari argued.

There seems to be no immediate relief in sight for distressed cotton farmers. Farm credit has been expanded which means more money available for borrowing but no reduction in interest rates. But the state government says it is grateful that at least more money is available.

“Having identified the problem in both human and statistical dimensions, the budget fails to provide a strategy for agricultural renewal,” NCF chairman MS Swaminathan wrote in an e-mail to this paper, reacting to the budget. “In the suicide-ridden districts of Vidharbha, we need an integrated package consisting of appropriate and affordable technology, services in terms of seeds, credit, insurance and extension advice. Above all, an assured and remunerative marketing facility.”

Swaminathan welcomed the increased outlay on irrigation and the expansion of farm credit. But he added that this was “not going to prevent farmers affected by economic penury from committing suicides”.

“Vidharbha needs rural godowns and warehouseing facilities which can ensure that farmers are able to get the best possible price and are not forced to resort to distress sales,” Swaminathan explained. “Unfortunately the budget is silent about farmer-centric marketing.”

The state government, though, is trying hard to hide its disappointment and focus on budgetary provisions it can make use of. “Expanding farm credit is an important step because it is crucial that loans are available to farmers,” Agriculture Minister Balasaheb Thorat told HT.

“We can make good use of the Mission for Pulses to increase their production. If it works, many farmers could get diverted towards pulses from cotton.”

The finance minister did outline some long-term solutions: an unimpressive Rs 100-crore for rain-fed area development programmes and Rs 12,400 crore towards water-related schemes.

Fertiliser companies will receive subsidies of over Rs 22,000 crore. Based on a study to be conducted, a pilot programme will be implemented for delivering these subsidies directly to the farmer, the budget stated. But in Swaminathan’s words: “The time for ‘pilots’ is gone and what we need is a movement like the one which triggered the green revolution in the sixties.”

Budget has nothing for farmers


UPA’s friends and foes attack Budget

New Delhi, Feb. 28 (PTI): The Union Budget for 2007-08 today drew flak from ruling UPA’s friends and foes alike who dubbed it as anti-farmer, anti-common man and listless.

The Left attacked the Government for “ignoring” their suggestions.

Opposition BJP and Shiv Sena dubbed the budget as “anti-poor, anti-farmer and anti-common man” which showed that the Congress-led coalition did not have any growth-oriented vision.

CPI leader Gurudas Das Gupta said the budget was a “deplorable exercise” as it has failed to address the problem of farmers’ suicides or the plight of unorganised labour.

He said the budget had even reduced service tax for corporates instead of raising it for mobilising resources for welfare schemes for masses.

Speaking in similar vein, Das Gupta as also Suresh Prabhu (Shiv Sena) said Finance Minister P Chidambaram’s efforts would not help the “aam admi (common man)” and the budget has no measures to rein in inflation.

Dubbing the budget as “listless, unimaginative and timid”, Prabhu said the finance minister has lost a golden opportunity to jack up the growth rate to ten per cent.

“In an attempt to please all, the finance minister has displeased everyone,” he said.

BJP leader Satyanarayan Jatiya said the budget had not measures for ameliorating the plight of the poor. “It is disappointing as the common man has been left out,” he said.

NDA Convenor George Fernandes said there was nothing in the budget for the common man. “Everything has been done for the rich and the elite,” he said adding that the people would come out on the street in protest against the budget.

Mohan Singh (SP) termed the budget as a “directionless exercise” which has failed to address the burning problems facing the nation, including the agrarian crisis and the spiralling prices.

A Narendra (TRS) said the budget was anti-poor and added that it was unfortunate that nothing had been done for checking the hike in prices.

RJD leader Raghunath Jha and Suraj Bhan (LJP), however, described the budget as development oriented and in favour of the poor.

RPI leader Ramdas Athawale hailed certain measures for the scheduled castes and tribes but said they were far short of expectations.

BJP leaders V K Malhotra and Sushma Swaraj said there was nothing in the Budget for “‘aam aadmi’ (common man), women and senior citizens”.

“While food for dogs has been made cheaper, it will be costly now for ‘aam aadmi’,” they said.

The BJP leaders were of the view that whatever minimal concession were announced by the finance minister would be swallowed by the inflation.

The two senior BJP leaders also questioned the rationale behind exemption granted in the Budget to the corporate sector, adding no serious efforts were made to check price rise as also farmers’ problems.

Describing the Budget as “dead”, Swaraj said Chidambaram had only announced constitution of committees and wanted to know “what he had been doing throughout the year”.

CPI-M leader Mohammad Salim said though there has been more allocation for social sector, there was nothing much for the common man and labourers.

“We also expected that Government should come out with concrete proposals for the welfare of minorities in the wake of Justice (Retd) Sachar Committee Report. But we are disappointed,” he said.

On the agriculture sector, Salim said the Budget has only increased credit flow, which alone will not help address the problems faced by agriculture sector as also the farming community.

Samajwadi Party leader Amar Singh said the Budget clearly speaks that “‘Congress Ka Haath’ (Congress’s hand) is only with the industrialists” and not with the common man as they have been claiming.

“There is nothing in the Budget to check inflation, price rise. There is nothing for women and the comman man,” he said adding that this Budget would lead to Congress’ “destruction”.

“This government has not learnt any lesson from Uttarakhand and Punjab…. ‘Aam Aadmi’ has nothing to do with sensex and GDP. Farmers are still committing suicides,” Singh said.

Replying to a question, the SP leader said Congress chief Sonia Gandhi “is treating Uttar Pradesh as ‘Apna Dushman Pradesh (her enemy state)”.

“Neither was there anything in the Rail Budget for Uttar Pradesh nor in the General Budget presented today,” he said.

Suspended Samajwadi Party MP and Janmorcha chief Raj Babbar said the budget was disappointing as “there was nothing for over 40 crore farmers in it”.

He said while subsidy has been provided to fertilizer manufacturers, there is no relief for its users (farmers).

JD(U) Digvijay Singh said the Budget was “directionless” and had nothing for the Industry or the Agriculture sector.

He also questioned the logic behind the education cess in view of the growing inflation and making states responsible for irrigation.

“This is a directionless budget before the election year’s Budget. We all know what will be in the next Budget”, he said.

12 more farmers commit suicide in Vidarbha

Pradip Kumar Maitra

Nagpur, February 27, 2006
There is no sign of suicides abating in the killing field of Vidarbha! Twelve more farmers have ended their lives in last 48 hours, according to reports reaching in Nagpur on Tuesday.

With the deaths of 12 more farmers the toll has now reach 79 this month while the figure touched 149 this year. Three suicides were reported in Amravati, two each from Yavatmal, Akola and Washim while one each in Buldhana and Wardha district.

They were identified as: Prabhakar Savai of Kalamla village, Suresh Banapure, Nandgaonpeth, Pawan Sadhashiv of Khushta village (all in Amravati), Ganesh Tike of Masani, Shriram Jelas of Pohradevi (both in Washim), Sakharam Choudhary, Jarur, Rahul Chinche (both in Yavatmal), Someshwar Sarkate of Wani-Rambhapur, Santosh Dhandale, Paras (both in Akola) Parmeshwar Bongale of Jamulghat (Chandrapur), Mohan Giri, Manoda (Buldhana) and Ramkrishna Gainar of Rohna village in Wardha district.

The Vilasrao Deshmukh government which has been claiming for pumping huge money to stem the on-going crisis, miserably failed to do so even after `implementations’ of over Rs 5,000-crore relief packages of PM and state government. The much hyped, Art of Living programme in several villages in the region even could not give much dividends.

Kishore Tiwari of Vidarbha Janandolan Samiti alleged that most of the farmers were the victims of ongoing loan recovery drive of the banks. “The prime minister’s package made it clear that the farmers would get at least one-year moratorium on recovery of loans.

However, all banks recovered their loans, virtually forcefully from farmers with the help of state-run cotton marketing cooperative federation during selling their raw cotton. Moreover, banks have also launched their loan recovery drive,” he further pointed out and said that the agricultural crisis that is forcing them to take such desperate step of coming suicide.

Talking to Hindustan Times, SK Goel, the divisional commissioner of Amravati, who has been supervising the relief packages, denied that there was any forcible loan recovery from banks. However, he admitted that the farmers of Vidarbha were facing hardship because of high cost of agro-inputs and meagre price of their produces.

E-mail Pradip Kumar Maitra: pradipmaitra@hindustantimes.com

Protest march against sucides by farmers, SEZs

Madhur Tankha

Activists demand creation of a Zero Hunger Act

NEW DELHI: Members of Youth for Justice, Kisan Log Abhiyan and MCKS Food
for Hungry Foundation jointly staged a march at Jantar Mantar here on
Sunday protesting against the continuing farmers’ suicides.

Wearing masks, the protesters holding banners like “The Constitution
Guarantees Me Right to Life Yet Death Haunts Me All The Time” shouted
slogans against the United Progressive Alliance Government’s policies
that were leading to lack of livelihood for farmers across the country.
They called for a Zero Hunger Act.

Claiming that the Haryana Government had sent notices to farmers of
Rewari to hand over their agricultural land for Special Economic Zones,
Kisan Lok Abhiyan State president Dinesh Joshi said: “We don’t mind
giving barren land, but parting with fertile agricultural land for big
multi-national companies is quite unreasonable.”

Stating that he had received a notice from the State Government to
vacate his agricultural land, Lal Singh Yadav of Haryana said he grows
“bajra” and mustard in his 10 acre agricultural land but will now be
left with no option but to hand over his ancestral land to the
administration. “At least farmers should have the right to decide
whether they want to sell their land nor not. And the price paid to us
by the administration is pittance.”

Sharing their concerns, a number of Delhi University students under the
Youth for Justice banner marched with the farmers. Stating that they
interacted with farmers of Vidarbha, Youth for Justice representative
Kapil Mishra said the youth and the farmers had come on a common
platform to awaken the Government so that it comes out with a
farmer-friendly budget.

Demanding separate packages and waving off loans for farmers in all the
affected districts, Mr. Mishra said organic farming should be encouraged.

“Since 1997, over 25,000 farmers across the country have taken their own
lives. The worst affected places are Warangal, Amravati, Vidarbha,
Karimnagar and Nizamabad. Even though we are boasting of 8 per cent
economic growth, the grim fact is that our farmers are committing
suicide. This means our policy-makers need to change their approach
towards running the economy,” said Mr. Mishra.

Besides travelling to Vidarbha next week in March for a first hand
experience with the situation prevailing in the rural areas, Youth for
Justice members will visit Capital’s Connaught Place and Ansal Plaza
every Sunday to distribute pamphlets to make Generation X aware of the
farmers’ plight.