Short-Term Sops Won’t Resolve Farm Sector Crisis: Dr. JP

Lok Satta Party President Dr. Jayaprakash Narayan today pointed out that bank loan waiver for small and marginal farmers and one-time settlement for other farmers will provide only temporal relief to a small section of farmers. An overwhelming majority of farmers are outside the institutional framework and borrow from private moneylenders. The waiver is also iniquitous in that it rewards only defaulters and lets down borrowers who have repaid their loans.

Reacting to the Union budget, Dr. JP recalled that farmers continue to commit suicide although Governments have written off farmers’ loans off and on. Instead, the Government could have constituted a Rs.100,000-crore agricultural fund to resolve farmers’ problems once and for all by taking steps for increasing productivity and ensuring remunerative prices. “We need to ensure credit to every farmer, small trader and labourer, improve marketing infrastructure, provide direct access to consumer, and add value to agricultural produce. A one-time loan waiver will temporarily improve banks’ balance sheets, but the plight of farmers and rural poor will remain unchanged. There is a real danger of rural credit system getting paralysed as it happened in 1990s. The loan waiver, decided upon with an eye on elections, provides temporary relief for a microscopic section of farmers at the cost of long-term gains.”

Dr. JP said that the central allocations to both education and health constitute 0.7% and 0.3% of the GDP in a country with a billion-plus population. Promotion of corporate hospitals and private educational institutions will not scratch even the surface of the crisis in the education and health sectors. The Government ought to have made free and quality education and healthcare as the fundamental rights of the people. Although many small schemes have been announced to benefit women, minorities and disadvantaged sections, the allocations are meager. Instead of squandering away precious resources on hundreds of schemes that have potential for large-scale leakages, the Government could have come up with a single social welfare scheme to make a direct attack on poverty.

Dr. JP, however, welcomed the raising of income tax exemption limits and reshuffling of the tax slabs. This will pass more money into the pockets of middle classes and salaried employees. The Government should also be complimented for meeting fiscal management targets.

However, there are signs of growth slackening in recent months. Infrastructure bottlenecks remain, and our cities are getting paralysed. An all-out effort is needed to improve roads, coal and power sectors and urban infrastructure. A massive effort to provide education of good quality for 12 years to all children, and free and quality healthcare to all are vital to enhance productivity, sustain growth and reduce poverty. Rule of law and elimination of corruption are vital for high growth. None of these problems has been seriously addressed in the budget. Dr. JP appealed to all sections to find ways of confronting these growing challenges before economic growth slackens and the promise of a bright future gives way to despair.