Since the grandiose announcement in 2016 of doubling farmers’ incomes, the real incomes of farmers have fallen. What can the budget offer in 2019?
In less than a hundred days from now, the country will decide the fate of Prime Minister Narendra Modi. The final pre-poll budget of his government was ex-pected to contain announcements to stem the angst arising out of the bleak rural landscape. The distress in rural India is on the verge of becoming a maelstrom that threatens to suck in the entire country and after four years of slogans and promises not delivered, farmers have stopped believing in miracles. It has been a long time since they have experienced any.
Ever since the grandiose announcement in 2016 of doubling farmers’ incomes, the real incomes of farmers have actually fallen. The data confirms this. It rarely happens that the growth of gross value added for agriculture at current prices is not more than what it is at constant prices. Agriculture prices have remained be-low the rate of inflation of between three and four per cent. This is possibly the third time that this has happened since India became independent.
The PM Kisan Samman Nidhi scheme is a progressive measure to transfer Rs 6,000 a year, amounting to Rs 75,000 crores, to farmers owning up to five acres of land. This is supposed to act as a stimulus for the rural economy. Sadly, it ex-cludes tenant farmers and landless labour. Even if it did include them, it would have been a challenge to identify each one and quantify their numbers. It can be done by registering them, which requires a firm commitment and a longer peri-od of time to implement.
The doubling of interest subvention for crop loans, two to three per cent sub-vention for animal husbandry and fisheries, two to three per cent for timely re-payment of rescheduled loans to farmers impacted by natural calamity, are wel-come steps. One had, however, hoped that interest subvention would be ex-tended to farmers’ term loans. Income-tax benefits should have been extended to animal husbandry and fisheries by classifying them as agricultural income. Alas, these measures were overlooked.
The net loss to farmers over the last few years is far more than can be compen-sated by better announcements in Budget 2019. Funding for cows through the Rashtriya Gokul Mission and the Rashtriya Kamdhenu Aayog is a good idea. On the ground though, farmers are busy chasing the stray cattle from their fields and would have been happier to get a subsidy for fencing of farmlands.
The big questions are: Will this budget create jobs? Will it increase fruit and vegetable processing? Will it transform livelihoods? Unlikely because it is more like using band-aid where surgery was required. The finance minister, without acknowledging government mistakes made over the past four years, has only tried to assuage the feelings of distressed countryside that government policies have economically decimated.
This is a pivotal moment in Indian politics. The exodus of farmers to other live-lihood options and the increasingly larger share of the non-agricultural compo-nent in rural incomes will reduce those dependent on agriculture as the ranks of consumers, who constantly demand lower food prices, swell. Therefore, this might possibly be the last general election in which farmers can influence the re-sults decisively. For now, the fear of the dissatisfied aspirational generation and the uncertainty of re-election will haunt the members of Parliament.
“After the battle was won, they found that the horse ate, as usual, too much hay, and crapped, as usual, all over the landscape.” After every election, farmers usu-ally get the same sickening feeling best described in words said under different circumstances by Tom Perkins, the pioneer Silicon Valley venture capitalist. It is worse this time because the feeling exists even before the elections are an-nounced. India is thus witnessing the risks not only of policy failure but of politi-cal success.