The ‘chowkidar chor hai’ [a euphemism to describe prime minister, Modi as thief in the context of allegations against him on the controversial Rafale deal] jibe hurled by Rahul Gandhi during his election campaign in three Hindi heartland states ad infinitum – a charge that caught the imagination of the electorate – was a major factor contributing to BJP defeat [Supreme Court judgement exonerating Modi from the charge came after voting was over].
The other reason for the grand old party staging a come-back was a promise by its President for waiving farm loans. This was too much of a temptation for the farmers. Even those farmers who were in a position to repay decided not to pay in the expectation that these would be waived. It is a different matter that after Congress took over the reins, it has not redeemed the promise.
Yet, this has led to a perception that sops such as loan waiver win elections. This even led to speculation that Modi was contemplating loan waiver at the all-India level. However, in an interview given to a news agency on the new year eve, prime minister has categorically ruled it out. He opined that pile up of debt was manifestation of a deeper problem and that his government was taking all necessary steps to combat it.
By shunning populism and taking such a tough stance, Modi has not only saved India from plunging into an unsustainable fiscal situation but has also sent out right message to the states. His statement cannot be dismissed as mere rhetoric [or posturing]. During the interview, he enumerated steps taken to empower farmers and enhance their income so that they don’t get in to a debt trap.
First, implementation of 99 pending irrigation projects those were held up for years [some for decades] at a vigorous pace will ensure assured supply of water to farmers thereby reducing their vulnerability to unreliable rainfall. In turn, this will help them realize consistently higher production and resultantly income.
Second, neem coating of urea has not only helped in ensuring its adequate and timely availability [by eliminating diversion for use in chemical industries] but also improved efficiency of fertilizer use. Further, distribution of soil health cards [SHCs] has ensured that farmers apply only those nutrients and quantity as required by soil. Both these measures increase yield and income.
Third, implementation of PM Fasal Bima Yojna [PMFBY] protects farmers against loss of income due to natural disasters afflicting crops at both the pre-harvest and post-harvest stage by paying small premium @ 2% of sum assured for all kharif [April-September] crops and 1.5% for all rabi [October-March] crops. Moreover, unlike earlier schemes, there is no cap on the amount of compensation.
Fourth, the government is investing heavily in building rural roads [to connect every field to network of roads leading to the market], rural markets [over 20,000 are under construction] and setting up of electronic-national agriculture market [e-NAM]. It is also putting up agro-processing centers, warehouses and cold chains. These help farmers sell their produce at a good price.
Fifth, it has implemented Dr Swaminathan committee recommendation to give farmers minimum support price [MSP] equal to the cost of production plus 50% over it as profit. It is also goading the state agencies to make purchases from them at the MSP and where ever, they cannot procure, reimburse farmers for the shortfall in actual price realization vis-à-vis the MSP.
Finally, it has put in place a nation-wide financial inclusion project viz. Pradhan Mantri Jan Dhan Yojana [PMJDY] aimed at empowering the poor. Launched on August 28, 2014, under it, a family can open an account with ‘zero’ balance and get a RuPay debit card. It comes with an overdraft facility of Rs 10,000/- and an accident insurance cover of Rs 200,000/- [persons who opened account before January, 2015 also get life cover for Rs 30,000/-]
This is of special significance to farmers as to a considerable extent, their indebtedness is due to borrowings from ‘informal’ sources viz. moneylender at high interest rate @5% per month. This situation arose because they did not have access to banks. By bringing banks to their doorsteps, PMJDY is helping them reduce their dependence on moneylenders. They can get credit from banks @7% per annum with a further concession of 3% if the farmer does not default.
The farmers can also get subsidy under a variety of welfare schemes such as fertilizers, LPG etc directly in to their Jan Dhan account. This ensures 100% transfer of the benefit unlike the earlier dispensation when pilferage was order of the day even as the beneficiaries received only a fraction of the dispatched amount. The account can also be a potent instrument of supporting other business should a farmer decide to start one to supplement his income.
The success of the scheme can be gauged from the fact that currently, there are 33.5 crore accounts under PMJDY with deposits of Rs 85,000 crore; of these, 25.6 crore or over 75% are operative. Contrary to the anticipation of doomsayers that these so called ‘no frill’ accounts would be a liability for the banks, it has turned out to be a bonanza for the latter as they can use the money to yield good returns.
The above is a fairly comprehensive package being implemented by present dispensation to empower farmers and increase their income. This requires mammoth efforts by all stakeholders viz. farmers, scientists, administrators, banks, state agencies etc on ground zero to make the desired impact. However, it would be naïve to think that these steps will start yielding results immediately.
Until such time, we start seeing the impact, the public needs to show patience. If, it does not and unseats Modi next year, this could be catastrophic [in Congress ruled MP and Rajasthan, urea is now selling at more than double the MRP besides farmers having to wait in long queues]. It will derail the process that he has set in motion to make farmers stand on their own feet.
The electorate needs to decide which way to go.