Sunday, 19 June 2016

Budget: Modi’s new found love for farmers is as misleading as his nationalism

Press Release

Budget: Modi’s new found love for farmers is as misleading as his nationalism
New Delhi : Just as Modi’s RSS inspired nationalism is misleading, his love for villages and farmers is also misleading. The government, which since the past two years has been hell bent on killing farming, is claiming to be their saviour in the year 2016-17 budget. This is Modi’s filmy formula to win the faith of the farmers – ‘first send in the goons to attack and then pretend to be the hero and save the day’. This government which is trying to sow the crop of social tension, fertilize it with the make-believe love for farmers, is inspired by the intention of increasing its political harvest. The farmers need to understand this truth and the intellectuals who call this budget farmer-friendly also need to rethink their contentions. The government which primarily supports big corporate houses cannot work towards strengthening the farmers-labourers-artisans-small traders-small scale industrialists.
The draught since the last three years has broken the back of farming and its growth rate dropped to 1.1 percent. This is why there was a hue and cry everywhere. Its heat was felt by the Modi government in three places especially. First the violent reservation movement of the Patidars in Gujarat, after that the defeat in Bihar assembly elections and then the recent movement by Jats in Haryana demanding reservation which engulfed the whole state in its flames and lead to caste-based riots. This meant that the farming castes were getting disillusioned with the Modi government and that is why he did three huge rallies in Odisha, Madhya Pradesh and Bareilly and after this made an urbane and corporate supporting former finance minister Chidambaram to sing the paeans of the villages.
In the budget, the government has shown a dream of doubling the income of the farmers till the year 2022. Why has the corporate supporting Modi government said this and how are they going to achieve this target? The growth rate of the agricultural sector between 2014-15 and 2015-16 has been from -0.2% to 1.1%. In this scenario, if the income of the farmers is to be doubled, then the growth rate of the agricultural sector has to be taken to 12 percent. To achieve this, on the one hand, the productivity of farming will need to be increased and on the other hand, minimum support price will have to be increased. There seems to be no big initiatives on these two fronts in the budget.
It’s not clear how much and how long the gain from the Prime Minister’s irrigation scheme and the Prime Minister ‘s crop insurance scheme will be. Especially there is no guarantee whether there will be water in the canals for irrigation. On the other hand, there is no guarantee that a majority of the portion of the 5500 crore rupees allotted to the crop insurance scheme will not go into the pockets of the insurance companies.
The trumpeting of the government that they have doubled the allocation for farming and the farmer’s welfare is actually a clever game. First of all, the government has removed the short-term loan interest subsidy from the department of financial services to the agricultural and cooperative department. After this, the agricultural welfare budget, which was reduced from 19,255 crore rupees in 2014-15 to 15,809 crore rupees in 2015-16, has been increased again to its earlier state, i.e. 20,984 rupees. In this way the expenditure of agricultural welfare increased from 15,809 crore rupees to 35,984 crore rupees. By giving 100 percent FDI exemption in agriculture based industries, to increase the investment in farming, the government has directed the neo-liberal economic reforms towards the villages. It remains to be seen how much it helps the rural industry and how much it destroys it? How much money reaches the villagers and how much of it reaches the middlemen?   
MGNREGA is in the most ironic situation. The government reached out for help to the same scheme which the Prime Minister himself called an epitome  of  failure of the UPA government. But the budget of the MGNREGA being 38,500 crore rupees is not a miracle. This is because the budget of MGNREGA in 2011 reached 39,377 crore rupees which the NDA government reduced to 29,436 crore rupees in the financial year 2015. If the government is not returning to the status quo, it is nothing new, in fact, it is only trying to rectify its mistakes.
This budget does not seem to be taking any action against the capitalists who take loans from Public Sector Banks and devoured them. It is ironic that the finance minister says a lot of big things but the bill presented last year about the bankruptcy of banks (Insolvency and Bankruptcy Code Bill) is still pending and even this year, there is merely an assurance that it will be passed. There is no concrete initiative in that direction. Export has been adversely affected because of the global slowdown. It is so much that even the depreciating rupee cannot make up for it.
On the urban front, there is one decision which is certainly laudable and that is the levying of a surcharge of 10 percent on those earning more than 10 lakh rupees dividend. This noiselessly done arrangement will ensure good earnings for the government and will facilitate in reducing the revenue deficit. But on the other hand, the government which claimed to put in 15 lakh rupees in every citizen’s account by bringing in black money from overseas, has given a tight slap to fiscal prudence by giving the inland black marketeers the option of converting their black money into white by depositing 45 percent. Along with this, the working class is troubled by the taxation of the EPF interest. This is the reason why some have commented that this is a case of relaxation for the criminals and a slap to the hard workers. Due to the widespread criticism on this front, the government is getting ready to retract.

Abhijit Vaid
General Secretary

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