Ref: Neglect of the poor
- Date:30/05/2005 URL:
Opinion - Leader Page Articles
Six on ten sounds right for this Government
The United Progressive Alliance Government has no sense of how serious
things are in the countryside. It seems to have forgotten what and who
brought it to power.
PRIME MINISTER Manmohan Singh's report card seems to be bang on. Six
on ten sounds about right. This Government took two exams to arrive at
that score. It chalked up ten on ten in the pro-corporate,
help-the-deserving-rich test. And two on ten in the pro-poor exam to
bring it up to 12 on 20. On average, I guess that works out to six on
Take the continued feeding frenzy at the corporate trough run by
Indian banks. They've written off some Rs.45,000 crore "stuck in NPAs
(non-performing assets)." Some companies now walk off with close to
Rs.100 crore each in "bad loans." These have been deemed "not
Sure, much of this happened during NDA rule. But the loot and scoot
sortie did not subside after the UPA came to power. NPA write-offs rose
16 per cent in 2004 and there is no sign they will decline. "Paucity of
funds" applies to the needs of the poor. Never to corporate robbery.
A handful of companies have been gifted more than what the Government
spends each year on public health. The country's primary education
goals could also have moved far ahead with that much money. (While on
education, the two per cent cess to go to the `Prathamik Shiksha Kosh'
is yet to be set up.) The UPA grudges every paisa it will spend on its
whittled down rural employment guarantee scheme.
Meanwhile, banks quietly convert short-term farm borrowings into
long-term loans to pre-empt any chance of a write-off. For many this
will mean a worse debt burden. (The rules for corporates, however, are
very different.) And there has been no increase worth the name in rural
credit or investment in agriculture.
Banks are actually shutting shop in many places. The share of rural
areas in the total number of bank branches fell quite a bit in the
1990s — and continues to fall. As Dr. P.S.M. Rao points out, in 1990
there were nearly 35,000 branches in rural regions. That is, over 58
per cent of total branches. By 2003, rural branches were down in both
absolute numbers and percentage. Now they account for under half of the
total branches. The more the banks wiggle out, the more moneylenders
The UPA has no sense of how serious things are in the countryside. It
seems to have forgotten what and who brought it to power. Even in
colonial days, the Raj was forced to take note of rural distress, usury
and its impact. `Agrarian disturbances' arising from debt and usury saw
a slew of laws enforced in the late 1800s. Today's response is a token
`fine tuning' of the system. It's as if May 2004 never happened.
The few faltering progressive steps of the UPA seem more the result of
pressure from its chairperson than from anyone within government. And,
of course, from a Left berated for villainy each time it speaks.
It's hard to spot a single piece of pro-poor (rural or urban)
legislation that this Government addressed with energy in the past
year. Legislation like the Seed Bill will make things a lot worse for
Indian agriculture. Contrast this with the vigour it displays each time
the SENSEX records a dainty flutter. Or the zeal in pro-corporate moves
in FDI, mining, disinvestment in profit-making PSUs, retail trade,
corporate tax — you name it. (So the NDA was a bunch of bad guys, but
NDA policies were fine.) It's the continuity, not the break, that
There's more. As of this week, the frenzied last minute purchase of
inputs — and loans from moneylenders — begins as the monsoon
approaches. New kinds of loans, on obscene terms. New forms of
exploitation coupled with old ones, unfold. The stress on rural
households is hard to describe. In 2004, farmers in Vidharbha hit by
crop failure found that each time they returned to the input dealers,
prices were jacked up. In some cases by 100 per cent.
Cartels at work
None of this seems a matter of concern. Nor does the rigging of prices
by cartels, both local and global, move the Government. This has in
fact intensified in the past one year. Coffee growers in Kerala commit
suicide while coffee prices rise at the global level. The product
booms, the producer goes bust. Pepper growers have likewise been
hostage to cartels.
Chilli farmers in Maharashtra and Andhra Pradesh despair as prices
tumble. Trader networks across borders have rigged a fall in both
States. Tonnes of Andhra chilli arrived in Nagpur this month just in
time to destroy prices there. This, after similar games had crashed
markets in Warangal and Guntur. The matter excites no discussion.
Serious governmental action — zero. Get into any of this and you're
told that agriculture is a state subject.
Not something the Centre can muck around with. We'd love to help, but
we really can't. That etiquette in no way hampers the Centre from
striking deals at the global level that impact massively on agriculture
in every State.
If things have not changed in the past year, it's because the basic
policy framework hasn't. Distress migrations are up. Rural jobs are
down. Rural debt is up. And farm suicides persist. A Kisan Sabha survey
of just 26 households in Wayanad that had seen suicides shows a total
debt of over Rs.2 million. Or about Rs.82,000 per household. The
average size of these farms is less than 1.4 acres. And a good chunk of
that debt is owed to private lenders. Nothing has happened in the UPA's
year in office that will alter this course of events.
As work gets less, more people leave their villages in distress and
hunger. In just the past few months, bus and rail traffic on major
migrant routes in different States has gone up. As indeed it has for
the past several years. In Wayanad, for example, about the only
profit-making body in the district is the Kerala State Road Transport
Sure, these problems cannot be solved overnight. Certainly not in the
year the UPA has had. But it was a period when right steps could have
been taken. When even firm intent is lacking, then the figure `two' on
the pro-poor report card is no more than a grace mark from the
Nothing has happened, for instance, to halt the collapse of the Public
Distribution System (PDS). Nor the fall in purchasing power of millions
of poor people. The bill brought in to ensure 100 days work per family
is faint-hearted. The idea that 100 days is enough, even ample, is
wrong. It shows no appreciation of the nature and extent of the
problem. And treats it as separate from much higher costs, or lack of
basic facilities like health and housing. (This bill also excludes the
Meanwhile, the drive towards the privatisation of just about
everything continues. Those States where the UPA's members are in power
lead the way. There is not the slightest sign that the Centre wants to
halt the insane rush towards privatisation of water. Its Planning
Commission chief has often signalled his bias for that step. Nothing
could be more fatal, but it seems the way we're headed. There is not a
single instance of a success in handing over water to private hands
anywhere in the world. But that hardly deters the Congress-NCP in
Maharashtra from racing towards it.
The Prime Minister, though, can take heart from the fact that his
report card reads better than that of the media. Take writers in a
leading business daily on the lowest third of society. "The bottom 400
million," says one, with a heavy heart, "is a disappointment and a
social responsibility, and while it harbours value (maybe not a
fortune), it is a difficult market to tap." (ET, March 26, 2005). Shame
on you guys down there in the 400 million. That's enough distress and
despair. Time to pull up your socks and be better buyers. (And whaddya
mean, what socks?) What are the malls for, anyway?
On the other hand, take how Lakme India Fashion Week is covered. This
event has been for some time a microcosm of the world the media
inhabit. This year was no different. Journalists outnumbered buyers
three to one. Unlike the bottom 400 million, the tiny number of buyers
is not a disappointment. Even more interesting, buyers at the show were
dependent on designers for their passes. The media were not. Their
place was assured. What would the LIF Week and the media do without
Both UPA and media flunk the rural test. But the absence of debate on
this in the media — and the Government — does not mean an absence of
debate itself. We live in a more radical world than many imagine.
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