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NREGS injection to rescue ailing farm sector
By Devinder Sharma

Pranab Mukherjee's effort to integrate NREGS with agriculture, forestry and water conservation in the Budget 2009 may help revive the rural economy.

A few days before Finance Minister Pranab Mukherjee read his budget speech, I was on some TV panels discussing the Economic Survey 2008-09. The exuberance that business magnates and economists working for private consultancy firms exhibited at the sweeping pro-reforms wish list that the survey report carried made me realise how disconnected corporate India was from the real India.

I wasn't therefore surprised when the stock market continued the downslide as the minister turned the pages of his budget speech. In fact, I now realise that the fall of the stock markets after every budget is so well manoeuvred that we now know how the investors and the TV channels exert public pressure. It is merely a lobbying tool for the investors to extract as much as possible from the government treasury. It doesn't mean anything else.

The minister has surely disappointed the corporate world. You could see from their pulled down faces how irked they were when Mukherjee simply ignored them. Looking at the way the budget was structured, it is quite obvious that it bore the stamp of 10 Janpath. We all know now that despite Manmohan Singh, P Chidambaram and Montek Singh Ahluwalia not wanting it, Sonia Gandhi had earlier prevailed upon them to bring in the National Rural Employment Guarantee Scheme (NREGS), and the Rs 71,000-crore farm loan waiver.      

The fall of the stock markets after every budget is so well manoeuvred that we now know how the investors and the TV channels exert public pressure.

Continuing in the same spirit, Budget 2009 provides a neat blend of an economic package that invests on the people rather than just providing funds for unwanted infrastructure. In my opinion if UPA-2 continues to provide a similar budgetary thrust on rural development and agriculture in the years to come, it will in some way provide the much needed succour to the marginalised sections of the society.

Take for instance Pranab Mukherjee's effort to integrate NREGS with agriculture, forestry and water conservation. For a crisis-ridden agriculture, suffering more from an acute paucity of farm labour, the minister has shifted the focus of the flagship programme from digging roads and ponds and turned it into a much more meaningful and productive investment.

This in reality is an economic stimulus that the agriculture sector was eagerly waiting for. To be launched in 115 pilot districts, and with an enhanced budgetary allocation of Rs 39,100-crore, the NREGS will now be able to rescue an ailing farm sector. I think the integration of NREGS with agriculture and forestry provides the right impetus to the troubled sector. Instead of launching new schemes, it is much more useful to ensure how the existing programme be made more effective.

Increasing the credit flow to the farm sector from the existing Rs 2,87,000 crore to Rs 3,25,000 crore, providing relief to farmers by extending the loan recovery period to the end of the year, and setting up a task force specially for the Maharashtra farmers are surely steps in the right direction. Although it is being assumed that the constitution of a task force is being done keeping in mind the ensuing elections in Maharashtra, this actually comes as an acknowledgement of a report submitted by the one-man
Committee headed by Narendra Jadhav, a former Vice Chancellor of Pune University.

It is not only 'money lenders' who drive farmers to commit suicide. The problem is compounded by a whole "new breed of money lenders" under the guise of agro-service providers to farmers like those supplying seeds, fertilisers and pesticides. According to Narendra Jadhav committee report, this new breed of lenders was exploiting farmers by way of charging 10 to 20 per cent higher price on seeds and pesticides, supplying inferior quality seeds and treating seeds and pesticides given on credit as a loan to farmer at 3 per cent interest per month or in other words 36 per cent per annum.

There is also a need to bring the micro-finance institutions under the scanner. They charge an exorbitantly high rate of interest varying between 20-48 per cent from the targeted poorest of the poor. This 'organised breed of moneylenders' too need to be made to reduce the interest rate to 4 per cent.      

Instead of launching new schemes, it is much more useful to ensure how the existing programme be made more effective.

A long over-due correction has come in the way of subsidy allocation for fertiliser. By promising to shift from a product base to a balanced application of nutrients base will help in removing the imbalance in fertiliser application that has led to the destruction of soil health. The promise of introducing subsequently a subsidy distribution mechanism wherein farmers would directly be provided money too is welcome. This will also help farmers use the funds available for organic manures and natural composting.

After the historic farm loan waiver in 2008, I wasn't expecting any sensational announcements in agriculture, but surely Pranab Mukherjee has tried to keep agriculture afloat knowing well that 1.6 per cent growth achieved in 2008-09 is not enough to spur an overall economic growth of 9 per cent. I am still not sure whether the measures and allocations that have been spelled out in the budget would provide the necessary boost to farming. The malaise is much deeper and would need radical structural changes to which the budget does not provide any indication.      

Pranab Mukherjee has tried to keep agriculture afloat knowing well that 1.6 per cent growth achieved in 2008-09 is not enough to spur an overall economic growth of 9 per cent.

At a time when climate change is emerging as a major global issue, Finance Minister has promised to make allocations for the eight missions under the National Action Plan on Climate Change. More than treating climate change as a separate subject, I suggest the government takes appropriate corrective steps in its economic policies and programmes. In fact, much of the global crisis arising from climate change is the result of faulty economic policies, and it is here that I don't see any realisation on the part of the government to nip the evil in the bud.

Disclaimer: The views expressed above are personal and do not necessarily reflect the views of d-sector editorial team.

Devinder Sharma  |  Food and trade policy analyst, columnist and activists' guide  |  hunger55@gmail.com

Devinder Sharma is an award-winning journalist, writer, and researcher globally recognised for his analysis on food, agriculture and trade policy. After completing M.Sc. in Plant Breeding and Genetics, he started his career as a journalist. A decade later, he quit active journalism to research on policy issues concerning hunger and food security, biodiversity, genetic engineering and IPRs. He writes and speaks extensively on these issues and has written more than 10,000 articles till date.

Write to d-sector  |  Editor's Note

Corruption Watch

The bad news is that corruption has not only sustained but has grown in size and stature in the country. With scams being a regular feature, seventy per cent respondents in a survey have rightfully opined that corruption has continued to increase in India. One in every two interviewed admit having paid a bribe for availing public services during last one year. Transparency International's latest survey reveals that the political parties top the chart for the most corrupt public institutions, followed by police force and legislatures. No wonder, India continues to make new records on the global corruption arena!

The shocking revelation is that the health and education sectors haven't remained untouched by this phenomenon. With 5th and 6th positions respectively for these sectors on the public perception chart on corruption, corruption has crept insidiously into these sectors of hope for the masses. With bureaucracy being fourth in the list of corrupt institutions in the country, corruption seems to have been non-formally institutionalized with little hope if public services would ever be effective in the country. With economic growth having literally institutionalized corruption, are we now expecting corrupt to be socially responsible - a different CSR.

Poor. Who?

Not giving 'aid' to India is one thing but calling it 'rich' is quite another. If one in three of the world's malnourished children live in India, what does average daily income of $3 indicate? It perhaps means that there is a relative decline in poverty - people are 'less poor' than what they used to be in the past. But having crossed the World Bank arbitrary threshold of $2 a day does not absolve the 'developed' countries of their obligation to part with 0.7 per cent of their Gross National Income in development aid. Should this three-decade old figure not be revised?  

An interesting debate in UK's House of Commons delved on future of development assistance by the British Government. While prioritizing limited resources has been a concern, there has been no denying the fact that development aid must be guided towards tangible gains over a short period of time to start with. There are difficult choices for elected governments to make - should they invest in long-term primary education or in short-term university scholarships? Which of these will bring gains and trigger long-term transformation in the society. As politicians continue to be divided on the matter, poverty persists!!   

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