The Challenges ahead for UPA Government

The people of the country have voted United Progressive Alliance to form the government. Dr Manmohan Singh and his new team will be formulated by the end of next week. But the faith and expectations that people have in the abilities of Dr Singh will be the tough task for the alliance. Though Left parties are off the shoulders of the Congress but still they need to deliver on few of the key issues at great pace. There are few areas which need to be looked after with immediate concern and rectify the problems gripping these areas. 

The first and foremost will be to revive the economy. With India’s best economist in the driver’s seat, a lot is being expected from the new government. PM has said in one the election rally that he will revive the economy in 100 days. Well that might be too optimistic approach but definitely a lot needs to be done to bring economy on 9-10% growth. He also needs to tackle the job losses due to current crisis. The stimulus packages need to cover both of the problems together. 

The second challenge will be the internal security and robust foreign policy. There is growing concern with volatile neighbours around. Taliban is barely 500 km away from India and hence it is imperative to revamp the security and intelligence agencies. There should be special law to prosecute the ones caught for waging war against the nation. The Police needs an overhaulment on priority basis and they should be equipped with latest gadgets and weapons. The home growth threat of naxalites should also be taken care off. Without peace all the efforts to make India stronger and leader in economy will be futile.  

The third biggest challenge for the government will be bringing the agricultural growth back on track. Not only the growth rate of agriculture sector is low but also the share of the sector in country’s GDP has come down drastically in past some years. The problem of low rate of capital investment, smaller capital formation and low share in the national income are some of the main problems facing by this sector that needs to be addressed very urgently. There are many reasons for this crisis, which mainly includes absence of adequate social support, uncertainty of agricultural enterprise in India, lack of credit availability etc. Need of the hour is to increase the productivity of the primary sector by ushering in a new green  revolution to raise the annual average growth rate of this sector to about five per cent per annum. 

One of the other major concerns should be the legitimate demand of the forces. Personally i feel this should be top agenda as well. For long time, they have not been deprived of their due by bureaucrats and policy makers. Indian Armed Forces are finding it tough to attract youth and is facing shortage of officers. If the Army cannot get youth just for the sake of low renumeration, then future is really bleak for our country. A nation is as strong as the military of that nation. Hence it will be good in the interest of this nation that the demand of Armed Forces is paid heed and their grievances are solved at the earliest. We cannot show callousness towards our soldiers who sacrifice so much for the safety of the borders and us.  Hopefully, the new government will do something positive on this front as well.  

There is tough task ahead for the new government. The way in which new cabinet will handle these issues remain interesting. Only time will tell whether Dr MMS can deliver in the tough time. I feel that he will be able to as there are no clutches of Left this time.

And the farmer suicide continues….

BILL BRYSON once said that there are only three things that can kill a farmer: lightning, rolling over in a tractor, and old age. He would have not mentioned only these three things, had he been to Vidarbha in Maharshtra.

Vidarbha has been in limelight for some time because of the farmer suicides in recent years ostensibly because of the falling minimum support price for cotton. The problem that Vidarbha farmers are facing is really complex and is precisely because of the lopsided policies of WTO and developed nation which has made cotton of Vidarbha uncompetitive in world markets.

India is a land where more than 60 per cent of population is into the farming but unfortunately the globalisation and better economy has failed to boost agriculture in the country. Last year, P Chidambaram in the Union budget announced Rs 72,000 crores relief package for the farmers but the recent figures clearly states the ineffectiveness of the same.

Figures available with the Vasantrao Naik Sheti Swawalamban Mission, the authority implementing the loan-waiver package, show 1,139 farmers killed themselves in Vidarbha’s six most suicide-prone districts in 2008 — a mere 107 less than in 2007, when 1,246 farmers committed suicide.

Every passing day there is news of more farmers committing suicides.

The main reasons for the failure of the loan waiver scheme are that:

Only a handful of farmers have received the money to date

Because local banks are yet to receive the bulk of funds

Even worse, many here didn’t qualify the for waiver

The average land holding is above the 2 hectare cut off

What farmers need for their survival is income, and not so much debt relief; in other words, the country needs agricultural renewal and productivity improvement.

A farmer is being neglected in his own country. There is no body which can understand or is really interested to understand the problems of a farmer. Annadaata is starving and we are looking on callously.

We haven’t bothered to stand up for the cause of our fellow country men. Why? Why is it that the voices of our farmers are being over heard by all the bodies? What are we waiting for?

As a common citizen I know that we only feel the pinch of the situation when we start to get affected by the same. Probably, we are waiting for the time when farmers will pick up guns and explode bombs to make deaf people/government hear their voices. We have discussed about cross border terrorism so much but in process we have forgotten the ‘economic terrorism’, where the victims are farmers and only farmers!

Inflation: The Real Cause of Hunger

IN THE last decade or so India has made progress in tackling the hunger and malnutrition, but the latest global hunger index (GHI) report says that the situation is still very critical in the country. India ranks 66th on the 2008 GHI of 88 countries, a report released by the Washington-based International Food Policy Research Institute (IFPRI) said. India has secured 23.7 points in the index, which is down by 8.8 points from 1990. The index ranked countries on a 100-point scale, with zero being the best score having no hunger and 100 being the worst.

Food riots have broken out in many countries, as people struggle with the rising costs of basic food material. A silent tsunami, which knows no borders, is sweeping the world and India can face maximum trouble. Indian agriculture has been in crisis for many years and the country is now facing high inflation and rising food prices. Yet, our political leadership has not gone beyond pandering to political interests and has not done anything about reforming agriculture, increasing yields or improving storage facilities.

The nation has shown great economic progress, but GHI has asserted that India is lacking in fight against hunger. The index was based on three indicators namely, prevalence of child malnutrition, rates of child mortality and proportion of people, who are calorie deficient.

India has distinction of being home to largest number of hungry people. Not having enough to eat is a reality for half of India’s 1.1 billion people. The latest slump in the economy and ever rising prices of food items is leaving more and more people hungry. The large number of hungry people can be the hole in India’s growth story. The number of people living below poverty line decreased from 36 per cent to 27.5 per cent between 1993-2005, but then number can be deceptive. The people who crossed the BPL (below poverty line) are just above it and the inflation is hitting this chunk the most. This is similar to what World Bank said, “seven years worth of poverty alleviation,” could be reversed by rising prices.

The great development story of India could be reduced to zilch, if some immediate and visionary measures are not taken. India so far has failed to recognise the gravity of the problem and solutions for the same. While the broader economy has averaged close to nine per cent growth annually over the past four years, agriculture has been growing just over two per cent a year. Architect of the green revolution in India, MS Swaminathan has put the situation very clearly. He says, “We are paying the price for complacency and for not paying adequate attention to either technology or public policy.

Agriculture hasn’t received the investment it requires, considering nearly two-thirds of our population depends on crops, animal husbandry, fisheries, forestry and agro-processing for their livelihood. The recommendations of the National Commission on Farmers are crying for attention.”

It is this area that is a blind spot. Domestic policies of agriculture do not address the long-term problem of food security. The result of these policies has been that the country, which was self-sufficient in food, had to import nearly 7.5 million tones of wheat during 2006 and 2007.

The imports were made at substantially higher prices than paid to Indian farmers, giving rise to the criticism. Moreover, the high-price imported wheat also added to the subsidy bill. Paying higher prices for imports, even as domestic farmers are given a minimum price barely enough to recover costs, is certainly not justified. It is clear that the government has to focus on the supply side. For this, a great change in thinking is required. However, whether the current lot of politicians can do it is quite doubtful.

Biofuels: The answer to India’s energy crisis

Bio fuels are being increasingly used as a climate friendly source of energy as opposed to other energy production methods. Bio fuels are derived from plants and emit less carbon dioxide and hence result in less green house effect.
Bio fuels have been an important source of energy in the United States of America, Brazil and several European countries. In Brazil and the United States of America bio ethanol is produced as a substitute for gasoline, while in the European countries biodiesel is produced.
In a developing country like India Bio fuels could come to the rescue of lakhs of villages which still do not have any electricity. Bio fuels could easily be used to solve the local energy problems of such villages. Fifty percent of these villages are still not electrified and depend on kerosene for their daily needs. Burning of kerosene is highly inefficient and known to have adverse effects on the health of the people. It is in this regard the bio fuels could be used to cater to the local needs of families for their household purposes as well as the production of oil. Straight vegetable oils or SVO’s are increasingly being used in parts of Africa and even parts of South East Asia as they can respond to the energy needs in villages. Jatropha plantation can be used to produce oil which can be used at the household level and excess oil can also be sold to other people. One hectare of jatropha plantation is equivalent to producing almost one and a half ton of oil every year which is more than enough for the local consumption. In addition to this there will be self sufficiency for the farmer and he could also financially empower himself by selling the extra produce.
But a recent study conducted by an institute in America shows that though Bio fuels solve the energy crisis of thousands of people and emit less carbon di oxide in the atmosphere but are not as earth friendly as they appear to be. Because of modern farming practices, Bio fuels release “Nitrous oxide” more commonly referred to as the Dentist’s laughing gas which is quiet more insulating than carbon di oxide.
Also doubts were raised on Bio fuels as there was a food crisis all over the world which was ironically considered to be because of people in the sub contintent. But the truth is that corn is used to manufacture bio fuels in America and latest studies have also shown that it has almost 0.9 to 1.5 times the global warming effect as that of gasoline. Bio fuels from rape seed are said to have a greater effect on global warming though bio fuel derived from sugarcane in Brazil is said to cause less global warming.
In the Indian context jatropha plantations could be used to energy and do not have too many effects on the environment. Bio fuels are a great method of energy production and farmers and scientists should try and use better methods so as to reduce global warming.
Though Bio fuels are the best answer to the energy crisis that India is facing, the right methods need to be employed to have the best effects else like in other countries if the wrong fertilizers are used, bio fuels could have unintended harmful consequences. Bio fuels should hence use land and energy efficiently and hence can be the answer to the energy crisis that India faces currently.

Agriculture And Indian Economy.


AMIDST ALL the software and the IT boom, the one sector that has been most ignored is the agriculture sector. What used to form the backbone of the Indian Economy is not being given enough privileges by the government now. The sensex and certain sectors of the economy have seen unprecedented growth, but yet the most important sector to the country has been lagging behind. And with more than half the population in the country still associated with agriculture, urgent reforms need to be made so that this sector in itself can grow rapidly. Contributing to almost one fourth of the nation’s gross domestic product (GDP), it provides employment to millions of people living in the rural areas.

P Chidambaram’s latest Rs 60,000 crore debt waiver to the farmers having less than five acres of land comes as a sigh of relief to most of the farmers all over the country. But yet this scheme is not applicable to all the farmers. Chidambaram could have played a masterstroke through this scheme, but from an economic point of view, it is a disastrous one. The same banks and financial institutions that used to give away loans to all farmers will have to think twice before doing that, as it may not be such a profitable decision after all.

The agriculture sector has seen a growth of about one per cent in the past few years as against the anticipated growth of four per cent. The main problem affecting agriculture is that farmers themselves don’t see it as a profitable option today. With the tremendous increase in population, the land holdings of farmers have shrunk to abysmal levels. The farmers themselves have become grossly indebted and if the rains are not on their side and the crop fails, then they are often staring at unemployment and mere survival.

International trade could play a major role in the rejuvenation and the transformation of this sector. The forward contract Regulation Act, which was having adverse effects in the production of wheat, has now been amended to cater to the problems of the farmers and to help achieve a single common market across the length and breadth of the country.

Public private partnership could augur well for the development of this sector and private investment could get rid of the problem of poor infrastructure. The market as well as the state should work hand in hand to ensure higher returns to farmers and better services to consumers. The private sector would both encourage cooperation and competition and would offer better value for money. The APMC act should be amended by all states and the Mandi taxes could be removed to allow for sustainable results for the farmers.

The Essential Commodities act has already been modified to permit the storage, marketing and movement of agricultural commodities. A unified or an integrated food law should be formulated to bring convergence in the food laws and to encourage the food processing industry. The tax on processes food could easily be lowered further. India is currently a medium sized agricultural exporter, but it could well become the main food supplier to the rest of the world if the agriculture sector could grow rapidly. Foreign buyers who prefer Indian food could be targeted to enhance the exports of such products.

Coming back to the budget, though it may be one of the most popular budgets designed to fetch votes in the upcoming elections next year, but at least it offered incentives to the farmers. If the right measures are taken now, the Indian agricultural industry has the potential to make India the leading agro economy of the world. We need to be able to compete on a global platform with respect to both cost as well as quality. A holistic and integrated approach is the need of the hour to attain sustainable development and growth in this sector.

Agriculture seeks another green revolution

Indian AgricultureThe original green revolution of 1960s was supposed to save 58 million hectares land. Today, 120 million of the 142 million cultivable hectare land, over twice the magnitude that the green revolution attempted to save in 60s, is degraded. In the state of Punjab, 84 out of the 138 developmental blocks are recorded as having 98 per cent ground water misuse. The critical limit of the use of ground water is about 80 per cent.

The result has had devastating impact on the agricultural community, leaving farmers with little choice of action. According to the data collected by the National Crime Records Bureau (NCRB), which records the number of suicides across India every year, and scholars at MIDS headed by Professor K Nagaraj, 1.5 lakh farmers committed suicide across the country between 1997 and 2005. Why is this happening? And why does media give little attention to this crisis?

The Indian economy has been doing very well since the last 5 years or so. With the overall growth rate almost touching the double-digit growth, the direction of economic policies being followed in the country are very much clear. We are doing very well in few areas but the lackluster growth in agriculture sector (4 per cent approx) is an area of concern. Without the development of rural India and the farmers, high growth rate of economy is meaningless to an agrarian country like India.

Not only is the growth rate of agriculture sector low but also the share of the sector in country’s GDP has come down drastically in the past few years. The problem of low rate of capital investment, smaller capital formation and low share in the national income are some of the main problems faced by this sector that need to be addressed very urgently.

Farmers committed suicides because of several reasons. Most of the cases of suicide occurred in states such as Andhra Pradesh, Maharashtra, Karnataka, Kerala and Punjab. A study says that more than 40 per cent people, who are currently engaged in agriculture, want an alternative option for their livelihood.

Daniel Webster once said,

“Let us not forget that the cultivation of the earth is the most important labor of man. When tillage begins, other art follows it. The farmers, therefore, are the founders of civilization”.

But, we as a country have forgotten them and instead of being grateful to them for providing us food grains we have refrained from them.

There are many reasons for this crisis, which mainly includes absence of adequate social support, uncertainty of agricultural enterprise in India, lack of credit availability etc. Almost 60 per cent of country’s work force is still employed in agriculture sector and self-sufficiency is quite important for a country as big as ours, due to increasing needs of food grains for the teeming millions.

The need of the hour is to increase the productivity of the primary sector by ushering a new green revolution to raise the annual average growth rate of this sector to about five per cent per annum. It would help the country in achieving sustainable and higher growth rate of the economy as a whole. Sluggish growth rate of the sector is also responsible for accentuating disparities and divides in India in the recent years.

Socio-economic indicators in the rural areas are still way behind in comparison with the urban and industrialized areas. The green revolution of the 1960s was the result of synergy among technology, public policy and farmers’ enthusiasm as well. The post-60th anniversary era in agriculture will depend upon our determination to implement Jawaharlal Nehru’s exhortation, “Everything else can wait, but not agriculture” in both letter and spirit across the country.

Proper pricing should be given to the farmers for their crops and some sort of exemption in loans should also be provided. People should be encouraged to make more investments in this sector. The research in this field should also be placed high on agenda and making farmers aware on optimum use of the land and methods of yielding better crops will also help to some extent.

Equally important is to improve the irrigation system in the country and it is extremely important to cover more and more areas under assured irrigation. The task is Herculian and it needs great show of will power from political leadership and bureaucracy both. Backwardness of the rural sector has been perpetuated over the past several decades and it would be foolish to believe that the deficiencies of rural sector would be removed in a short span.

The Agriculture sector needs very serious and urgent reforms because if this sector is in crisis then as a nation we cannot prosper. We need to focus on the solutions of the problems and will only do harm by neglecting it.