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Growth for the Sake of Profit
"As Dr. Muhammad Yunus, the Nobel laureate, said, "Faster growth rate is essential for faster reduction in poverty. There is no other trick to it." So said India’s minister of finance, P. Chidambaram in his budget speech. Drawing on his words must have seemed a politically correct thing to do. Mr. Chidambaram might want to add another quote to his cupboard. This one from the late Edward Abbey, environmental activist and writer. "Growth for growth’s sake is the ideology of the cancer cell." Few things grow as relentlessly as that cell does, with such fatal results. As the cancer of neo-liberalism claims an ever-higher toll, its greatest theologians now include standard disclaimers in their chant. Growth has to be "inclusive" and "sustainable." Even the World Bank and the International Monetary Fund have learned these escape clauses. In any case, growth in India this past decade has been neither. The appalling distress in the countryside is just one measure of this. Election after election also rubs it in. Especially that of 2004, which brought the United Progressive Alliance to power.
Even going by the government’s economic survey, by its own other data, agriculture is choking. Per capita growth has been negative. Farm incomes have taken a beating. Thousands of farmers commit suicide each year. The government has long known there is a frightful crisis, one driven by human agency, by state policy. Yet, for all the noise, Central plan outlay on agriculture as a share of GDP sees no increase worth the name. Nor is there anything that touches the acute farm distress on the ground. In that the trend of falling state investment in sector after sector continues, this budget does not break with neo-liberalism. It just dolls it up.
One of the most important steps the UPA took in 2004 was to assign the National Commission on Farmers the grim task of studying this crisis. The work of the NCF caught the imagination of farmers nationwide. In Vidharbha or in Andhra Pradesh, farmers when they speak at all of `relief packages’ do so with scorn. What they do demand is action on the NCF’s findings. It is hard to find to find a single one of its many vital proposals addressed in this budget.
There are no steps towards a Price Stabilization Fund. None at all towards debt relief, let alone a waiver. Nothing has happened that will make input costs cheaper. Racketeering on that front is not only left alone, it can dash on regardless. The ‘huge’ boost for rural credit does not touch the high interest rates, which are such a major source of the trouble. And government knows very well that small and marginal farmers have gained almost nothing from its earlier `expansion’ of credit. No incentives for food crops in crisis regions. No action, to cite just one problem, to prevent the dumping of American cotton subsidized by billions of dollars and devastating prices here and around the world. (In just marketing year 2001-02, as an official report shows us, U.S. raw cotton exports to India had tripled to more than a million bales.)
There is no move to use valid tools like raising duties to halt a process that is literally killing Indian farmers. Import duty on cotton remains at a low 10 per cent. Indeed, the lowering of other duties in many cases will hit other sectors of Indian agriculture too. Not just cotton. If this is a pro-farmer budget, it’s scary to think of what an anti-farmer one would look like. As always, the standards of judging the deal given to poor Indians differ totally from those used to measure what a `sulking India Inc.,’ gets. The big boys shouldn’t be too disheartened, though. Business as usual will resume after a pause for the Uttar Pradesh elections.
Even as the budget is hailed as `pro-farmer,’ there comes the embarrassment to the Centre from a Congress-led State. Responding to a PIL on farm suicides, the Maharashtra government tries telling the Supreme Court that the Center’s dragging its feet over funds for Vidharbha was a big factor in the problem. True, it backs off pleading an error when this is highlighted in the press. But it gives you a picture of how bad things are.
Many have shown that some of the `higher allocations’ of the budget are negative when adjusted for inflation. The Left, for instance, points out that spending on the government’s flagship employment programs is up by 7 per cent. Which amounts to stagnation, given inflation levels. The increase in outlays on food subsidies, at 6.2 per cent, means a cut in real terms.
There is also a rather clumsy dodge on the National Rural Employment Guarantee Scheme. To begin with, it was given Rs.11,300 crore [one crore = ten million] when it needed much more. And that was for 200 districts. Now it is to be "expanded" to 330 districts. But the outlay goes up by just Rs.700 crore. So the number of districts covered goes up 40 per cent. The money goes up six per cent.
The `huge’ hike in outlays for health still does not bring us to even the modest 2-3 per cent of GDP level promised in 2004. View education outlays as share of GDP and you see how far behind we still are. In the end, though, it’s not just about sector to sector funding. It’s the whole direction. And in that very little has changed. India is still on a path damaging and dangerous to the poor.
Big media, though, now view the Finance Minister with a `how-could-you’ air of injured innocence. He actually had to face some questions on television. He was questioned. But from a point of view which, at most other times, he would have been happy with. That is, the liberalization and `reforms process’ from a corporate outlook. (India Shining has been back for a while, jostling for space with India Rising and India Poised. But that’s another story.)
Mr. Chidambaram accused one interviewer of being obsessed "with the corporate sector." That was code for `wait till after the State elections.’ ("Our program continues after a small non-commercial break.") He even tried to explain that a "thrust" on agriculture in fact favored Indian industry. And he had a real point there. But I doubt it went home. The debate amongst the elite is still in terms of a `let down.’ A `setback in the pace of reforms.’ For the media, this is India with a shining black eye.
And so we have a budget that gives `top priority’ to agriculture. And eight more farmers have taken their own lives in Vidharbha. This is now a region where farmers killing themselves are directly addressing the Prime Minister or Chief Minister in their suicide notes. After the Prime Minister’s Independence Day Speech in 2006, you might have expected something different. That was a rare occasion. Dr. Singh spoke clearly of the state of our farmers. Even more rare for an I-Day speech, he singled out Vidharbha for special mention. And he clearly acknowledged a major crisis was on in agrarian India. Not a trace of that sentiment can be found in the philosophy or the numbers of this budget.
Nor is there even a sense that much has been learned from the polls in Punjab and Uttarakhand. There is even some bravado about how the Congress has fared better in rural Punjab. The price rise, among other things, was and is a major issue. But the government’s response to it is at most levels tokenism. Not a lesson has been learned by this government. Like others before it, it imagines it will make a few `course corrections’ just before the polls. It has forgotten the reasons for its win in 2004. Nor does it want to see just how awful the crisis in the countryside is.
We are now at that mid-way mark where, historically, the Congress revives the Bharatiya Janata Party. A party gasping for breath after 2004 regains its oxygen. The Congress is hard at work on this in Maharashtra, too. The government’s terrible power cuts have a clear regional, urban, and class bias. Talleyrand is said to have remarked of the Bourbon monarchs of France after their restoration that they had learned nothing and forgotten nothing. The UPA has gone one better. It has learned nothing and forgotten everything.
P. SAINATH is the rural affairs editor of The Hindu (where this piece initially ran) and the author of Everybody Loves a Good Drought. He can be reached at: firstname.lastname@example.org.