India

  • AIDWA hails focus on agrarian crisis

    The All-India Democratic Women's Association (AIDWA) has hailed Union Finance Minister P. Chidambaram's initiative of taking cognisance of the huge agrarian crisis and taking steps to bring relief to farmers, who include a large number of women also. In a statement, Subhashini Ali, president, and Sudha Sundararaman, general secretary of the AIDWA, said the measures for debt waiver and debt relief did not, however, address the critical issue of loans taken from private moneylenders. Secondly, many regions in the grip of crisis such as Vidharbha and Rayalaseema were dry land, where individual holdings were usually more than two hectares, eligible for relief. The crucial question of reduction in the rate of interest to 4 per cent on agricultural loans was ignored. Finally, it was not just debt relief but rejuvenation of the entire agricultural sector through a massive increase in public spending that would alleviate this crisis, the statement said. After four years, the United Progressive Alliance (UPA) government heeded to the voice of lakhs of anganwadi employees but their demand for an increase in wages was met only partially. Secondly, the budget did not reflect the allocations for universalisation of the Integrated Child Development Services and make 14 lakh anganwadi centres functional by the end of 2008 as per a Supreme Court directive, especially at a time when child malnourishment and infant mortality continued to remain high. Given the huge increase in the prices of essential commodities, especially wheat, rice, pulses, it was expected that the budget would suggest measures to curb inflation, which was exacerbated by the recent increase in fuel prices. Food security The statement said the UPA gave an undertaking in the Common Minimum Programme (CMP) to strengthen the public distribution system and move towards universalising it. However, the meagre increase in the food subsidy allocation from Rs. 31,456 crore last year to Rs. 32,667 crore was hardly adequate to ensure basic food security for more than 70 per cent of the population that lived below poverty line. "This cannot meet the needs of food-deficit States such as Kerala, as well as States that were adversely affected by the recent cuts in allocations of foodgrains,' it said. The allocations for health and education remained far below the targets set in the CMP and the decision to shift the burden of the Sarva Shiksha Abhiyan to the States showed the lack of commitment of the Centre to implement the constitutional guarantee of right to education. "As far as gender budgeting is concerned, we welcome the fact that more Ministries had provided a gender budget analysis of their expenditure,' the statement added.

  • "Root cause not addressed'

    The Union budget's proposal for clearing the indebtedness of small and marginal farmers is ad hoc. It does not aim at removing the root cause of farmers' deprivation, which is lack of remunerative price for their produce, Subramanian Swamy, Janata Party president said. Describing the budget as "hotch-potch retrograde,' Dr. Swamy said it lacked vision, strategy of reforms or direction. The claims of the Finance Minister on accelerating growth in gross domestic product, output of food grains, institutional credit for agriculture and performance under the Bharat Nirman were misleading as the Economic Survey 2007-2008 revealed the contrary. Besides, "there is no long-term scheme for desperate farmers committing suicide, salaried persons "suffering from inflation,' small and medium industries "suffocated' by globalisation and for stabilising the "volatile' stock market.

  • No relief for farmers in informal sector

    They are indebted to moneylenders and middlemen, and pay huge interest Finance Minister P. Chidambaram on Friday unveiled a Rs.60,000-crore debt waiver and debt relief scheme for four crore small, marginal farmers and other institutional loanee farmers. But his proposals did not indicate any provision in the Agriculture Ministry's budgetary allocation, nor was there any explanation on resource mobilisation for the one-time waiver. The Minister later said the government would provide the banking sector liquidity, equivalent to the amount being written off, over three years. The budget ignored 42.3 per cent farmers in the informal sector who are indebted to moneylenders and middlemen and pay phenomenal rates of interest. Their debt stood at Rs. 48,000 crore in 2003 and a majority of farmers who committed suicide borrowed from the informal sector after becoming defaulters in the banking system. No new scheme Nor has any new scheme been announced in this year's agriculture budget. In fact, there have been cuts in the allocations for the National Crop Insurance Scheme and the pilot weather-based crop insurance scheme. At the same time, the Minister did not give in to the wide-scale demand for reduction in the institutional interest rate on farm loans from seven to four per cent. Announcing the never-before debt waiver scheme, Mr. Chidambaram said it was a measure of expressing the nation's gratitude to the farming community. All agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007 will be covered under the scheme. For small and marginal farmers with a holding of up to two hectares, there will be a complete waiver of all loans that were overdue on December 31, 2007 and which remained unpaid till February 29, 2008. OTS for others In respect of other farmers, there will be a one-time settlement (OTS) scheme for all loans that were overdue on December 31, 2007 and which remained unpaid till February 29, 2008. Under the OTS, a 25 per cent rebate will be given against payment of the balance of 75 per cent. The agricultural loans restructured and rescheduled by banks in 2004 and 2006 through special packages and other loans rescheduled in the normal course as per the reserve Bank of India guidelines will also be eligible for either waiver or the OTS on the same pattern. The total value of the overdue loans being waived is estimated at Rs. 50,000 crore and the OTS relief, at Rs. 10,000 crore. Over three crore small and marginal farmers and about one crore other farmers will benefit from the scheme. The farmers, after being granted debt waiver or on signing an agreement for OTS relief, will be entitled to fresh loans from banks in accordance with normal rules

  • Focus on SSA alone akin to 'fooling ourselves': FM's adviser

    As the UPA government grapples to step up spending on education to 6 per cent of GDP, a commitment made in its governance agenda, a key Finance Ministry official has said accent on primary education will not yield results if not complemented by focus on secondary schooling. Sarva Shiksha Abhiyan (SSA) tantamounts to "fooling ourselves... It (focus) should go to secondary education as well,' Adviser to Finance Minister Shubhashis Gangopadhyay said at a discussion on Budget 2008-09 organised by the Centre for Budget and Governance Accountability here yesterday. SSA is the government's flagship programme for universalisation of primary education implemented in partnership with states. The UPA, in its National Common Minimum Programme, had pledged to raise spending on education to 6 per cent of GDP and at least spend half this amount on primary and secondary sectors. "Whether it is 6 per cent or 8 per cent or 10 per cent. These are just talking points,' Gangopadhyay said, adding that unless the spending gives the desired results it made no sense to talk about percentage alone. He was responding to a query whether the government should revisit its commitment to spend 6 per cent on education, considering the fact that the country's Gross Domestic Product has grown by a robust 8.8 per cent in the last four years. According to the Economic Survey for 2007-08, the government has made a provision of Rs 10,671 crore for SSA. Raising expenditure on education to 6 per cent of GDP was a goal set in 1948 by the Kothari Commission, and reiterated over and again by the National Policy on Education, but successive governments are yet to fulfil it. "You need to spend a minimum of 8 per cent of GDP for education (considering the GDP expansion),' Economist Jayati Ghosh, who was part of an official committee that looked at spending requirement for education, said. "It is very very clear you need very significant expansion. Forget the percentages,' she said, adding that if any government has to really look at meeting the minimum goal on education sector, it has to double the spending. Panelists at the discussion said spending on education has been declining. During the NDA regime, it was 3.6 per cent of GDP and has fallen to 3 per cent now. According to the Economic Survey 2007-08, the achievements under SSA up to September 30, 2007, include construction of 170,320 school buildings, 713,179 additional classrooms, 172,381 drinking water facilities, construction of 218,075 toilets, supply of free text books to 6.64 crore children and appointment of 810,000 teachers, besides opening of 186,985 (till March 31, 2007) new schools. Finance Minister P Chidambaram, in his Budget speech, too had said the focus of SSA will shift from access and infrastructure at the primary level to enhancing retention; improving quality of learning; and ensuring access to upper primary classes. He proposed to increase the total allocation to education sector by 20 per cent from Rs 28,674 crore in 2007-08 to Rs 34,400 crore in 2008-09. Of this, SSA will be provided Rs 13,100 crore.

  • FM raises a toast to women, minorities

    The Union Budget 2008-09 has seen funds for women, minorities and Scheduled Tribes go up substantially. One of the beneficiaries of a 24 per cent rise in allocations for the Ministry of Women and Child Development is a plan to prevent trafficking of girls for which the ministry has chalked out a scheme called Ujjwala. The Budget has kept a provision of Rs 9 crore for the scheme, following sustained campaign by NGOs and international bodies. The ministry's allocation of Rs 7,200 crore for 2008-09 is up from Rs 5,793 crore, the revised estimate for the 2007-08 Budget. A major part of the enhanced allocations would go to Integrated Child Development Services (ICDS) that caters to the nutritional and healthcare needs of pre-school children and mothers in rural areas. The ICDS allocation is mainly meant for the hiked emolument for workers and helpers of some 6,284 Anganwadi centres across the country. Another Rs 200 crore has been allocated for a new scheme

  • Anachronistic budgeting

    Is the 2007-08 fiscal deficit 3.1 per cent of GDP, or is it 3.5 per cent

  • Sethu: Indian Govt counters environmental concerns

    Indian Govt counters environmental concerns Hit hard by the flip flop over the

  • Do more for farmers

    Union finance minister's Rs 60,000-crore loan waiver in the Union Budget proposals has won kudos for the government and has to some extent queered the pitch for the Opposition on this score. But a lot more needs to be done if the Congress-led UPA government has to regain the confidence of farmers. Bank loan is just one minor part of the problem and concerns only those farmers who take loans from banks. There are millions of farmers who take loans from moneylenders and commission agents at usurious prices. Maybe the government could issue an ordinance to stop payment on these loans, because in most cases the interest amount is more than double the actual loan. Even in the case of the farmers whose loans with banks have been waived, fresh trouble will begin next season. The crux of the problem which any farmer from Hoshiarpur to Wardha or Warangal will tell you, is remunerative price. Unless he gets remunerative prices, he will be in debt to the banks again. And what about corruption? A farmer from Hoshiarpur, for instance, if he wants to buy a tractor which costs say Rs 5-6 lakhs, has to pledge his four acres of land in addition to the ten per cent interest he pays on the loan. When he pledges his land he has to deal with the patwari and senior revenue officials. He has to bribe them to get his work done. Then he has to look for a middleman and pay him to negotiate to get his loan from the bank and finally at the bank he has to grease the palms of officials sanctioning the loans. On Rs 4 lakhs he pays over Rs 4,000 as bribe, and this is the minimum. The other important issue is cost of production. The government gives the farmer what it calls his cost of production. Perhaps the bureaucrats use their own parameters to arrive at the cost of production, but the farmer needs to survive. The businessman, for instance, adds his profits and perks to the cost of the items he produces. Shouldn't the farmer get a reasonable profit? He and his family work 24 hours, seven days a week, 365 days a year on their farm. In Maharashtra, farmers wait all night for power to run his pumps. And yet his cost of production does not take all this into account. This bias against the farmer must be removed.

  • Congress plans rallies to cash in on farm debt waiver

    Buoyed by the popular reaction to the farm debt waiver and debt relief scheme announced in the budget, the Congress has planned a series of rallies in State capitals and district headquarters. It will begin with a massive show of strength on the Ramlila grounds here on March 9. At the same time, Congress president Sonia Gandhi will meet State-wise all-party MPs from March 3 to 5 in the Parliament House. In a bid to pull out all stops to cash in on the popular sentiment, Ms. Gandhi's meetings with MPs will generally carry the message that the momentum and high ground gained by the party on the farmers' indebtedness issue, should be maintained throughout the year when six States go to the polls, and till the Lok Sabha polls next year. The States going to the polls this year are the ones where farmers would benefit the most from the Rs.60,000-crore debt waiver scheme. These are Karnataka, Rajasthan, Madhya Pradesh, Chaattisgarh, Delhi and Jammu and Kashmir. A senior party leader said that the mood in the party is upbeat and the leadership wants it to be sustained. Central to Ms. Gandhi's meetings with MPs would be the message that the programmes launched by the Congress-led UPA government should be "properly explained' to the people. In particular, the Congress would like to take the credit for the National Rural Employment Guarantee Programme and now the farm debt relief issue, the sources explained. On Monday, Ms. Gandhi will meet MPs from Andhra Pradesh, Assam, Bihar, Manipur, Meghalaya and Arunachal Pradesh. On Tuesday, she is to meet MPs from Jammu and Kashmir, Himachal Pradesh, Delhi, Karnataka, Kerala, Tamil Nadu, Puducherry, Haryana, Punjab, Chandigarh, Uttar Pradesh and Uttarakhand. On Wednesday, the Congress president will meet MPs from Madhya Pradesh, Rajasthan, Gujarat, Goa, Dadar Haveli, Daman and Diu, West Bengal and Andaman and Nicobar. The AICC has planned the rallies keeping in mind the hundreds of Congressmen who want to "thank' the Congress president for the decision on the debt relief scheme.

  • Ending the debt trap & attaining food security

    Finance Minister P. Chidambaram's initiative is a major step in recognising the country's debt to farm families but much more needs to be done. Finance Minister P. Chidambaram's budget 2008-09 has aroused widespread interest in methods of saving our small and marginal farming families from indebtedness and acute economic distress, which lead to occasional suicides. The steps proposed in the budget will give relief to nearly four crore farmers, at an estimated outlay of Rs.60,000 crore. As stressed by Mr. Chidambaram, this is a major step in recognising the indebtedness of the country to farm families who, th rough their toil in sun and rain, are safeguarding national food security and sovereignty. The question arises whether this step will mark the end of farmers' dependence on moneylenders and traders for their credit needs. Some of the following issues need consideration: First, the definition of small and marginal farmers has to be different for irrigated and dry farming areas. The present definition classifies marginal farmers as those owning up to 1 hectare and small farmers as those owning 1-2 hectares. Farmers cultivating crops in rainfed, arid, and semi-arid areas may own 4-5 hectares but their income is uncertain and their agricultural destiny is bound closely to the behaviour of the monsoon. A large number of farming families affected by the agrarian crisis in Vidharbha fall under this category. They will not be eligible for debt waiver and debt relief under the present scheme. A second problem relates to the source from which loans have been taken. The programme announced in the budget covers farmers who have taken loans from scheduled commercial banks, regional rural banks, and cooperative credit institutions. It does not cover farmers indebted to moneylenders and traders. According to the National Sample Survey Organisation (NSSO), 48.6 per cent of the farm households surveyed were indebted; of these 61 per cent had operational holdings below 1 hectare. Of the total outstanding debt, 41.6 per cent was taken for purposes other than farm-related activities, such as healthcare and domestic needs; 57.7 per cent of the outstanding amount was sourced from institutional channels and 42.3 per cent from moneylenders, traders, relatives, and friends. It has been estimated that in 2003, non-institutional debt accounted for Rs.48,000 crore; and out of this, Rs.18,000 crore was at an interest of 30 per cent per annum or more (NSSO 59th Round cited by the Economic Survey 2007-08). The Expert Group on Agriculture Indebtedness chaired by Professor R. Radhakrishna has recommended, in its report of July 2007, the inclusion of the financially excluded, particularly the small borrower households, and the adoption of risk-mitigating measures for agriculture. The concept of financial inclusion is in its early stages of operationalisation. Loan waiver is the price we have to pay for the neglect of rural India during the past several decades, as reflected in a gradual decline in investment in key sectors like irrigation, post-harvest technology (even today, farmers dry the harvested paddy on roads), market, and communication. The four crore farmers who are to be relieved of their debt burden before the end of June 2008 will become eligible once again for institutional credit for their cultivation expenses during kharif 2008. The challenge now is to prevent them from getting into the debt trap again. For this purpose, both Central and State governments should set up immediately an Indebted Farmers' Support Consortium at the district level. This should comprise farm scientists, panchayati raj leaders, input supply agencies, representatives of relevant government departments and financial institutions, rural and women's universities and home science colleges, private sector and media representatives, and others relevant to assisting the farmers relieved of their past debt in improving the productivity and profitability of their farms in an environmentally sustainable manner. This is essential for enabling them to have a higher marketable surplus and thereby more cash income. The smaller the farm, the greater is the need for marketable surplus to avoid indebtedness. Such an Indebted Farmers' Support Consortium should get the four crore farmers the benefits of all the government schemes such as the Rashtriya Krishi Vikas Yojana, the National Food Security Mission, the Accelerated Irrigation Benefit Programme, the National Horticulture Mission, Rural Godown and Warehousing Schemes, and the National Rural Health Mission. If this is done, every farm family released from the debt trap should be able to produce at least an additional half tonne per hectare of food grains or other farm produce. This should help increase food production by about 20 million tonnes during 2008-10. At a time when global and national food stocks are dwindling and prices are rising, this will be an extremely timely gain for our national food and nutrition security system and for the control of inflation. We should ensure that the outcome of debt waiver is enhanced farmers' income and production. The prevailing gap between potential and actual yields in the crops of rainfed areas such as jowar, bajra, millets, pulses, and oilseeds is over 200 per cent even with the technologies on the shelf. The restarting of the agricultural career of four crore resource-poor farmers through loan waiver could mark a new dawn in both agrarian prosperity and national food sovereignty

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