Union Budget 2018-19 is an anti-farmer budget - People's Review

Know why the Union Budget 2018-19 is an Anti-Farmer Budget


Ever since Finance Minister Arun Jaitley tabled the Union Budget 2018-19, there has been a hullabaloo over the budget’s theme, which the corporate world and the mainstream media controlled by it labelled as a pro-farmer budget, much before the BJP laid the same claim on the last full budget of the Modi regime.

This eccentric marketing of the Union Budget 2018-19 by the corporate media proves beyond doubt that the BJP and its corporate handlers are eager to deceive the people with virtual lollipops at a time when they have no real lollipop to offer. The pro-farmer claims of the Union Budget 2018-19 are a hoax. They are mere subterfuges to distract the people’s attention from the failures of the Modi government in the last three and half years.

The Union Budget 2018-19 is neither a pro-farmer nor a pro-poor budget. Like any other past budgets of the Modi regime, it’s a hardcore pro-corporate and pro-foreign capital budget, which is packaged in a “populist” way by the gang of economic advisors and high-salaried bureaucrats of the Modi regime to peddle the regime’s dubious, anti-farmer agenda as a genuine “pro-farmer” one.

What makes the Union Budget 2018-19 an anti-farmer budget?

Despite the tall claims made by Arun Jaitley during and after his budget speech, the Union Budget 2018-19 only consists of sham promises of farmer welfare in the most ambiguous terms. According to the prevailing situation of Indian agriculture sector, the Union Budget 2018-19 can be labelled as a gimmick budget that is absolutely anti-farmer in content and intent.

We will analyse in the following paragraphs why the Union Budget 2018-19 is actually an anti-farmer budget, presented one year before the Lok Sabha polls.

The hoax of doubling farmers income by 2022

Though the corporate-controlled media and their pundits are incessantly discussing the Modi regime’s promise of doubling the farmers’ income by 2022, this is not a new declaration at all; the finance minister is talking about it during each of his budget speeches since the Union Budget 2016-17. We have analysed this claim in this article earlier, where we have found that in more than 17 states of the country, in an estimate of FY 2015-16, the majority of the farmer households earned something around ₹20,000 per annum on an average, which breaks down to a meagre ₹1,600 a month. Even if we ignore the impossibility of doubling the farmers’ income as the agriculture sector, which provides employment to 49 per cent of the population, must reach a whopping 14.4 per cent growth rate from a rickety 2.1 per cent at present to actually double it, we still have to fight with a soaring inflation and fall in real wages in 2022, when even by earning ₹40,000 per annum, the Indian farmer will still remain in the languidly wailing state, where it’s imprisoned at present.

The fallacy of increasing the MSP on unannounced crops by 50 per cent

Arun Jaitley claimed that the government will increase the minimum support price (MSP) of crops by 50 per cent of the input costs, and this declaration was shown as an attempt by the Modi government to implement the 2006 Swaminathan Commission Report on agriculture, which the BJP promised to implement during the 2014 general election campaign. The Swaminathan Commission suggested  the fixing of the MSP for crops “at least 50 per cent more than the weighted average cost of production”, however, the BJP promised in its 2014 Poll Manifesto “to enhance the profitability in agriculture, by ensuring a minimum of 50 per cent profits over the cost of production”. This twisting of the recommendations of the Swaminathan Commission report by the BJP during the 2014 election campaign now reflects very prominently in the Union Budget 2018-19.

There are two cost measures for agriculture, A2+FL and C2.

The “A2+FL” costs consist of all expenses paid by the farmers in cash and kind, like the expenses on different heads like seeds, fertiliser, hired labour, fuel, irrigation, insecticides, and above all, an imputed value of the unpaid labour of the family members that went into the farming process.

The “C2”, on the other hand, is the comprehensive cost measure, which includes A2+FL and also includes imputed value of land rentals, interests over working and fixed capital, etc. The margin over A2+FL is called gross returns, and that over the C2 is called net returns.

The Modi government is trying to increase the MSP by 50 per cent using the A2+FL as the base and there is the catch. The MSP is already higher by 40 per cent on the A2+FL cost and therefore, the new hike will be a meagre 10 per cent hike on the present MSP.

The net income of the farmers has fallen drastically in the last quarter-to-four years of the Modi government. According to this report, the net returns of MSP on C2 fell drastically between 2014-18 period. The average net return of MSP on C2 for paddy fell from 23 per cent during the UPA II rule in the 2009-14 period to mere 6 per cent during the rule of the Modi government between 2014 to 2018. The gross returns of MSP over A2+FL for paddy fell from 69 per cent to 39 per cent. For the politically crucial wheat crop, the net return of MSP on C2 fell from 36 to 32 per cent, while over A2+FL it fell from 112 per cent to 101 per cent. The returns of MSP over C2 for cotton fell from 30 per cent in the UPA II reign to 2 per cent during the rule of Modi.

Dr Swaminathan too raised the question over this ambiguity and the deceptive measures taken by the government. Dr Swaminathan told to The Hindu that by only allocating 50 per cent more MSP over A2+FL on unannounced crops, the Modi government has actually left out the vast majority of farmers who cultivate the announced crops like paddy, millets, etc. The government’s unclear stand on this issue of MSP will keep confusing the farmers and the economists who aren’t the cheerleaders of the regime. At the end of the day, it will be the farmers who will be hit hard as nothing will change for them.

The farmers showed their anger against the Modi regime and different BJP-ruled state governments last year over the saffron camp’s utmost apathy towards the cause of the farmers. This higher MSP gimmick is a cheap trick employed by the Modi regime to fool the farmers and win their support in its favour. However, despite these gimmicks, it seems less likely that the spectre of Mandsaur massacre, where farmers were killed by the state machinery of BJP-ruled Madhya Pradesh government, will stop haunting the Modi regime in the elections to come.

Reduction and rhetoric over agriculture

The biggest farce of the Union Budget 2018-19 is that despite the rhetoric of calling itself a farmer-focused budget, the actual allocation to the agriculture sector is merely 2.36 per cent of the budget, which is even lower than the 2.38 per cent allocated in the Union Budget of 2017-18!

Moreover, there is no increase in one of the major rural employment generation schemes – the MNREGA. Like last year, only ₹55,000 crore was allocated to this project, which employs a large number of rural population during the non-cultivation season of the year.

There is absolutely no increase in the allocation to MNREGA, despite the sky-soaring claims by Arun Jaitley over the Modi regime’s plan of improving and streamlining the scheme last year. This apathy shown by Arun Jaitley towards the MNREGA scheme during consecutive budgets, is driving home the point that the Modi government is attempting hard to kill the programme in the near future to save the money and use it in bailing out big corporations.

The finance minister also reduced the allocation for the Rashtriya Krishi Vikas Yojana, which has an RE of ₹4,800 crore in FY 2017-18, while only ₹3,600 crore is now allocated for it in the FY 2018-19. Even the RE, in the future, is less likely to go above ₹4,000 to ₹4,200 crore by the end of the FY 2018-19. While the RE for the Market Intervention Scheme and Price Support Scheme was ₹950 crore in the current financial year, it’s reduced to mere ₹200 crore for the next financial year.

The everlasting issue of unavailability of a farmer-friendly credit system

Thousands of farmers, especially the small and marginal farmers, are thrown into the abyss of extreme destitution due to the predatory credit system prevailing in the countryside. While only a small proportion of the farmers, the big feudal landlords and rich farmers, can avail institutional credit from banks and through Kisan Credit Cards, the majority of them are forced to borrow from unscrupulous feudal money-lenders, who charge them exorbitant interest rates and evict them from their lands in case of payment failures, which happens very often due to the weather-dependent agricultural practice in India.

Even after moaning over the plight of the debt-distressed farmers during the Lok Sabha election campaign of 2014, the Narendra Modi government has done nothing to benefit the farmers in the credit domain, except for announcing a very vague debt waiver scheme for Uttar Pradesh, soon after Yogi Adityanath managed to bag the state in the assembly election last year. In the Union Budget of 2018-19, even a year before the election, Arun Jaitley didn’t try to address the issue of the debt trap that is killing the farmers due to the lack of a proper and farmer-friendly credit system. The issue is ignored as if it never existed. This shows the sheer lack of zest of the Modi regime over the issues that trouble the majority of the farmers.

Silence on the threat of climate change

The report of the Economic Survey 2018-19 by the team of the Chief Economic Advisor, Arvind Subramanian, projected a total fall of 25 per cent agricultural output within few years due to the threat posed by the issue of climate change. This means more drought and flood will be affecting the farmers in the coming years.

This challenge can be met with tackling the climate change threat at a global level as well as by improving the irrigation facilities in rural India. Arun Jaitley just claimed that the government will help the farmers of Northern Indian states of Uttar Pradesh, Haryana and Punjab with a subsidy on the purchase price of machinery that will help them remove crop residues from their fields after harvesting, to prevent them from burning the crop residues and cause pollution.

However, with this claim, there was no clear indication on how much subsidy will be available on which machinery and how much money the farmers have to invest in procuring such equipment. Though the issue of pollution gripping Delhi and turning it into a death trap is a very crucial one, Arun Jaitley didn’t show what he actually has to offer.

On the irrigation front, the Finance Minister raised the allocation for groundwater irrigation project called the Prime Minister Krishi Sinchai Yojna — “Har Khet Ko Pani” – in 96 irrigation deprived districts where less than 30 per cent of landholdings get assured irrigation presently. In the revised estimate of the present financial year, the allocation for the groundwater irrigation project is ₹1,888 crore, while it’s now raised to mere ₹2,600 crore.

A little different project, the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), has got a hike of 20 per cent, from the revised estimate of ₹2,670 crore to ₹3,178 crore in 2018-19. However, though the increase percentage may appear high, the amount will fall short to meet the long-term goals of irrigation, even when Arun Jaitley is claiming that by 2019 all ongoing projects will be completed.

This allocation and the over-dependence on groundwater, which is depleting fast in the areas with poor rainfall, is too less to meet the challenge of climate change, global warming and the altering of the raining pattern throughout the country.

The Modi government didn’t learn anything from the water crisis that has now left Cape Town parched. It’s indeed a major threat to all metro cities, followed by the already parched vast countryside of a big country like India. The government should have started working by focusing on providing a long-term irrigation solution to the country. The meagre funds allocation by the government for irrigation is not going to help the farmers in the long-term.

The farmers: the favourite prey of the rulers

Indian economy is an agrarian economy and it employs 49 per cent of the population, which makes it the largest sector and employment generator; still, the contribution of agriculture is falling on a year-upon-year basis, since the opening of the floodgates to the neo-liberal economy. The contribution of the agriculture sector to the Indian economy is now hovering around 16 per cent only, according to the recently released Economic Survey report of FY 2017-18.

The sector’s growth has fallen from 4.9 per cent in FY 2016-17 to 2.1 per cent in 2017-18 (CSO data), on the basis of the new base year used in the calculation. Though the Ministry of Agriculture is trying to refute this claim of the CSO and Arun Jaitley roped in Arvind Subramanian to counter the CSO estimates, the report from the grassroots is loudly projecting a gloomy picture for agriculture.

This severe crisis in the agriculture sector is caused by the dominance of the semi-feudal production relations, feudal land holdings, accumulation of wealth and resources in the hands of the most powerful feudal classes and the disastrous policies of the subsequent governments that whacked agriculture very mercilessly. While the big landlords and rich farmers enjoyed the pie, the marginal, poor and medium farmers, along with a large number of landless peasants struggled hard for a little share of the trickled-down crumbles.

Now that hunger, poverty and death reigns in the lives of the majority of the farmers, the Modi government is trying hard to cajole the farmers of the country to believe that the government will ensure “better days” usher. The Modi regime used the bait of “better days” as a subterfuge to force the farmers of North and West India into electoral obeisance in the past and it hopes to reap dividends using the same carrot and by intensifying communal polarisation before elections in the future as well.

It’s to help the Modi regime go ahead and wean the farmers from the bloc of the opposition that the Union Budget 2018-19 is used as a tool to befool them into believing that at the last leg of its journey, the Modi government is taking “first of its kind of initiative” to better the lives of the farmers. The rhetoric of the Modi government will bring nothing but utmost difficulties in the lives of the farmers and deteriorate their living standards further.

To free themselves from this pain, the majority of the rural population, whose lives are closely connected with agriculture and other related economic activities, must join the broad ranks of the democratic forces to defeat the Hindutva fascist Modi regime and destroy its anti-farmer and anti-agriculture policies. The Union Budget 2018-19, an utterly rubbish and anti-farmer budget, must be condemned and trashed to the gutter of anti-people economics as soon as possible.

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An avid reader and a merciless political analyst. When not writing then either reading something, debating something or sipping espresso with a dash of cream. Street photographer. Tweets as @la_muckraker

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