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Mainstream, VOL 62 No 24, June 15, 2024

What NDA 3.0 should Do to Relieve Rural Distress | Soma Marla

Saturday 15 June 2024, by Soma S. Marla

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Rural India, especially in the north coasted the ruling party its majority in parliament, thus forcing ruling Bharatiya Janata Party to depend on regional allies to muster the simple majority for government formation. BJP has lost a third of its rural parliamentary constituencies, reflecting rural discontent, low crop MSPs, Agniveer and high unemployment. The BJP retained only 126 of the 251 rural seats it previously held in 2019 Loksabha, while The BJP-led National Democratic Alliance won 221 rural and semi-rural Lok Sabha constituencies especially in Uttara Pradesh, Haryana and Rajastan in the just-concluded election compared with 251 rural and semi-rural constituencies in 2019. While, the INDIA bloc won 157 rural and semi-rural constituencies in the present 2024 election. Present NDA 3.0 government should immediately address issues related Rural stress to bring relief to farming community.
Prime Minister Narendra Modi again made a big show and boasted that his government’s commitment to farmers by signing the first file releasing payment next quarter of PMKisan Samman Nidhi. Agricultueral experts say, this is not a special favour for farmers as this is a routine payment, and this seventeenth instalment should have been paid in late April. Due to elction code the payment is delayed and now being paid to farmers.

Rural distress

Simmering rural discontent. over lack remunerative agricultural prices, high unemployment, decade long wage stagnation and rising food prices coasted dearly for ruling party in the recent elections.

During the last decade and half, rural distress has been mounting in rural India. The cost of production in agriculture increased by nearly three times fuelled by high prices of fertilizers, seeds, diesel, pesticides. Though government is periodically announcing MSPs, is not providing relief to farmers when go to sell the harvested produce in markets. In economic terms there are two types of incomes- Nominal and Real. While the nominal incomes (in currency terms) with small rise in MSPs the Real incomes are falling. Real income is tied to purchasing power (Consumer Price Index) of consumed food and household industrial goods. As per estimates, real income has decreased by 60 % during the last 15 years, chiefly due to disparity between agricultural and industrial commodities in the markets. This price imbalance has resulted in transfer of nearly Rs 28 lakh crores of the total estimated Rs 42 Lakh crores worth of total farm produce in the country. This means for every rupee purchase of agricultural goods by a consumer in the super markets, a farmer is merely receiving 26 to 30 paisa. This surplus is being pocketed by grain merchants, millers and mainly by metropolitan corporate houses. Hence the received real income is unable to sustain families leading to distress witnessed in rural India today. Dismal performance of farm sector is reflected in the slowdown in average agriculture growth. Neither the much advertised Doubling farmer income nor three farm laws worked to benefit the farmers.

Rural unemployment and stagnant wages

Rural distress has not been receiving adequate attention from policymakers. Instead of providing employment and succour to rural families, Union government had cut the budget allocations to various subsidies, MNREGA. The MGNREGA and subsidy allocations have been coming down in the last 2-3 years. Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) rose 48.8 percent in April with 30.2 million people seeking jobs, according to data from the ministry of rural development. The demand for work under MGNREGA increased sharply by 48.8 percent in April,” (National Council of Applied Economic Research, NCAER, May, 2024). Perhaps, government might have not spent on the subsidies and MNREGA while tax flows, especially GST, have been highly robust.

Dwindling rural Consumption

While India’s provisional GDP grew 8.2 % in FY24, thanks to the manufacturing and mining sectors, sadly, the share in GDP and the Gross value added (GVA) has come down to 1.4 percent in FY24. Average agriculture growth is usually at 3 percent, in 2023-24 it was only 1.4 percent, coupled with high food inflation. In February-April, average food inflation was at 8.6 percent. Not only, decline in consumption and rural demand is visible not only in fall of household items but also in fall in sales of tractors, motor cycles in rural markets.

What is Expected

Instead of resorting to superficial measures new NDA 3.0 government should take the following immediate measures to relieve the simmering rural distress:

  • Immediate and one time farm loan waiver
  • Calculate crop MSPs as per recommendations of M.S. Swaminathan’s commission and bring a law ro ensure legal guarantee of mSPs for all crops in markets
  • Nearly 130 million rural poor are deprived of cheap ration under PDS. The sections of poor, including migrant workers are invisible since the last population census were held way back in 2011.
  • Remove GST on purchase of farm inputs including fertilizers, farm equipment and others
  • Construct grain and cold storage godowns in all Taluq headquartes
  • Pay crop insurance compensation straight to farmers bank accounts within 30 days of crop damage. Entrust crop insurance exclusively to public sector insurance firms, as private firms pocketed huge profits by not paying relief funds to affected farmers.
  • Scrap Agniveer and restore previous army recruitment process to provide relief to farming families.
  • Double the funds for rural employment scheme MNREGA
  • Make huge investments in villages by repairing local irrigation and drainage channels, building rural hospitals, schools and roads.

(Author: Dr. Soma marla, Retired Head & Principal Scientist, Crop Genomics, Indian council for Agricultueral Research, Pusa, New Delhi)

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