Just halfway there: Stimulus is less than what it appears to be, govt must do more for farmers
Ajay Vir Jakhar
April is upon us; the Indian summer will soon sear the land and wheat harvest will commence in full measure in Punjab & Haryana, while it has already begun in other parts of the country. Other than that, we do not yet know what will come next. As wheat is procured under the central government’s MSP program, the onus lies with the government to assuage the unease of the states and the farmers that harvest will beginon time, procurement will happen, stocks will be lifted and payments received as in the years past. A delay in harvesting or lifting of food stocks in the mandi also amplifies farmers’ risk of produce being damaged due to anticipated unseasonal rains. In case the process is delayed, the government must assure farmers it will, if required compensate and extend the wheat procurement season.
Closure of markets has created anxiety amongst farmers as cereals, fruit and vegetables are ready for harvest across the county. Particularly, the poultry industry is severely hit. These need to be permitted for transportation to functioning mandisto reach consumers. The lockdown has curtailed the supply chain. Allowing movement of tractors and labour between villages will ensure that harvesting isn’t impacted and supply chains can resume.
Over the past two days, it’s evident that standard operating procedures for continuity of supply chains and farm operations in a National Disaster Management Authority framework are missing for ground level administrators to fall back upon. Therefore, multiple confusing notifications by the centre and the state will continuously be issued throughout the lockdown, as it had happened previously with a botched GST rollout. Lack of clarity within the establishment and lack of credible communication by the central and state governments is making farmers anxious about farm operations. Hue and cry by farmers resulted in seeds and pesticide sales being added to the list of essential commodities and rightly so, other issues too are slowly being resolved. These recently notified changes are not reflecting on the ground and farmers continue to suffer.
A black swan event like coronavirus, could not have come at a worse time for India as our economy was already deaccelerating. Understandably India’s arsenal to respond economically stood depleted because of past policies, but the present relief package is wanting in greater depth and direction that is expected from democratically elected representatives. To understand the stimulus, a context is necessary.
Today every farmer is paying tax on diesel consumption of up-to Rs. 2,300 per acre depending on their practice. Over the last 6 years, total tax collection on account of diesel consumption by farmers for agricultural use would have been about Rs. 1 Lakh crores.
The Rs 1.70 lakh crore stimulus is not what it appears to be, its possibly half the size of the announced quantum. Even though price of crude has halved since October 2019, the common man is paying an extra Rs. 35 per LPG cylinder.Consumers are being forced to pay higher prices for essential commodities, as profiteers begin to cash in on the supply chain disruption. This negates the benefits of cash transfers or free Gas cylinders to BPL families.
The average annual days of employment provided per household under the MGNREGA is about 45 and not 100 as claimed. Like Punjab which gives Rs.240 per day wages under MGNREGA, more than half the states were already committed to give more than the hiked wages of Rs.202. Further, due to the lockdown, work under the scheme has come to a standstill everywhere, thus the Rs 20-increase in MNREGA wages is only an eyewash. Instead of assuring availability of 100 day of work on demand under MNREGAand that farmers will receive the promised MSP for once, the bureaucracy hoodwinked the union cabinet to get assurances of timely release of their own salaries. Ideally, the govt should have credited 30 days of advance wages to all those who have availed of the MGNREGA last year, to be adjusted over work done in the coming six months.
Unprecedented circumstances require bold and swift decisions. Announcement under PM Kisan is only about releasing outstanding dues. The government should double the PM Kisan payments to Rs.12,000 annually for this year. Distribution of grains to 80 crore people is commendable but it will remain a mystery why it wasn’t announced & distributed in February when the crisis was on the horizon, FCI storages were overflowing and there was no space to store the new crop due in April. Transferring three monthlyinstalments of Rs.500 each to 20 crore women in Jhandan accounts is good targeting of resources but amounts to less than two days of minimum wages per month. Though, providing Rs.2,000 to 3 crore senior citizens and socially marginalized sections is a compassionate step.
The RBI has to create money and directly provide people with purchasing power and should be announcing to waive off interest of farm loans and rescheduling of loan payments. Now the hope is that the government will quickly transfer money to the beneficiaries. Issues of red tape have to be overcome for it is not time to fear errors of inclusion, but it’s time to seriously worry about errors of exclusion. Farmers have wholeheartedly voted for the PM twice; it is the time he reciprocated the feelings and returned the favour. Every season has an end for a harvest to begin. (Indian Express)
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