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PM Modi’s promise of doubling farmers’ income needs a reality check

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PM Modi’s promise of doubling farmers’ income needs a reality check

Agriculture is in deep crisis, deepened further in the last three due to restrictions on livestock trade.

Yesterday (Wednesday, June 20) Prime Minister Narendra Modi interacted with select group of farmers through video-conferencing over the Namo App to hear stories of how some of them had increased incomes and were leading happy lives. Modi then repeated his promise of doubling farmers’ income by 2022.

Just about a week earlier, a Down To Earth (DTE) report titled “How India lost its historic agriculture recovery growth phase in just four years” should bring this narrative down to proverbial earth.

Citing Government data, it noted a disturbing trend. In financial year 2017-18, agriculture would be growing at 2.1 per cent compared to 4.9 per cent in the previous year – and this, when India had a normal monsoon and previous two years of below normal monsoon had provided a low baseline: after a drought, agriculture growth is higher due to low baseline level.

The DTE said a crucial fact that has been missed by Modi government is its own series of rigorous reports on agriculture called “The Committee on Doubling Farmers’ Income” led by Ashok Dalwai.

The first report of the Dalwai committee using inputs and research of over 100 experts has pointed out that India’s agriculture is currently in a deep crisis.

This analysis is supported by reports that farmers’ distress, and consequently, protests are growing all over the country. If that is unpalatable to Modi government, Modi government’s Dalwai committee report gives more inconvenient facts.

According to DTE, it says the country’s agriculture sector witnessed its highest ever growth phaseduring 2004-14: the period of Congress-led UPA-I and UPA-II governments. The report calls it the sector’s “recovery phase”; a term it defines as historic.“The agricultural sector grew at the growth of around 4 per cent per year during 2004-05 to 2014-15 and the growth was quite impressive as compared to 2.6 per cent per annum during the previous decade (1995-96 to 2004-05),” says the report.

More so, the report attributes this impressive agricultural growth more to government interventions than to other situational favourable conditions, said the DTE. “The most important factor for improved performance of agriculture, post 2004-05 period, has been the price received by the farmers caused by a number of underlying factors: hike given to MSP, increase in foodgrain procurement, increase in global agricultural prices and strong domestic demand for food,” it finds.

All recent farmers’ protests amid bumper harvests are for increasing the government’s minimum support price (MSP) and to force the NDA government to keep its electoral promise of a MSP plus 50 per cent extra to farmers.

Significantly – and alarmingly – it said that in the last three years, less than 10 per cent farmers could sell their produces in MSP, which is growing at pace seen during the 2004-14 period. Also, farmers across the country sold their bumper harvests at 30-50 per cent less than the MSP for all their produces during 2015-17.

The report just adds on to this worry of Modi. It sees the recent farmers’ protests as an indication of deepening crisis in agriculture sector post the “recovery phase”.

“At the basic level, agriculture when defined as an enterprise comprises two segments–production and post-production. The success of production as of now amounts to half success, and is therefore, not sustainable.”

“Recent agitations of farmers (June-July 2017) in certain parts of the country demanding higher prices on their produce following record output or scenes of farmers dumping tractor loads of tomatoes and onions onto the roads or emptying canisters of milk into drains exemplify neglect of other half segment of agriculture.”

Modi government’s performance in agriculture has been lacklustre, observes DTE. In 2015-16, agriculture contributed 17.4 per cent to India’s GDP, which was 18.3 per cent in 2013-14, the year before he came to power. In 2014-15, agriculture reported negative growth at -0.2 per cent. Despite this low base, next year it reported 1.2 per cent growth. And in 2016-17, it was estimated to be 4.1 per cent. At an average, the growth in the last four years is around 2 per cent.

Modi government’s cow preoccupation to push Hindutva agenda worsened this with cattle trade ban.

“The last three years are also known for restrictions on livestock trade. While government fiddled with this sector, the agrarian crisis deepened,” said the DTE.

It said the Dalwai Committee Report points out that the biggest contributor to the agricultural growth in 2004-14 was livestock sector, which has never reported a negative growth in the last 35 years.

“Thus, the livestock sector is likely to emerge as engine of growth of agricultural sector and can be relied upon for risk mitigation and minimising the losses to the farmers in case of even worst outcomes from others sub-sectors. Previous studies have unanimously reported that livestock as the best insurance against agrarian distress as the sector is the source of sustained income and generates income more frequently than the crop sector,” the report says.

It is known by this time that across north India, due to the restrictions and raids from cow protection groups, livestock trade and prices have crashed, the DTE said.

The DTE then delves into the question of whether a last-ditch attempt by Modi government to make its last full budget all about rural and agriculture sectors turn around the fate of farmers and rural Indians, or at least result in rich electoral harvest for Modi.

It answers in the negative, saying that the current agrarian crisis is too deep-rooted to witness an instant recovery through a farmer-friendly budget.

Looking into the income of a farmer in India, it says even during the “recovery phase”, a member of an agricultural household earned around Rs 214/month but his/her expenditure was about Rs 207, leaving a disposable income of just Rs 7/month.

Since 2015, India has witnessed two major droughts, some 600 incidents of crop losses due to unseasonal rains and other related incidents, and finally in two years of bumper harvests prices for their produces crashed majorly. It means, a farmer neither has any base capital to invest, nor has he the capacity to take the risk of going back to agriculture. This has added to the crisis that manifests in extreme resentments.

For the first time in recent history, relatively rich farmers were out on the streets protesting for better price for their produce, noted the DTE.

The Dalwai committee report shows that the government’s move to import foodgrains to curb inflation has majorly distorted the market against the domestic farmers. India’s export of agricultural produces has dipped. It recorded more than five times growth during 2004-2014: from Rs 50,000 crore to Rs 260,000 crore. In a year it dipped to Rs 210,000 crore in 2015-16, or a market potential loss of Rs 50,000 crore.

On the other hand, agricultural import has reported constant growth. It was Rs 30,000 crore in 2004-5, which increased to Rs 90,000 crore in 2013-14, the last year of the UPA-II government. In 2015-16, it reached to Rs 150,000 crore.

Close to 22 per cent of farmers subsist below the poverty line. The dip in farmers’ income, while giving a call for doubling income, shouldn’t be just another grand plan for a “new India”, because agricultural growth critically decides poverty reduction.

According to historic data, agricultural growth has much more impact on poverty reduction than any other activity like industrial growth. The DTE said it is time government got its focus back into the factors that once ensured this recovery phase.

India News

Rahul Gandhi slams PM Modi-led central government over terror attacks in J&K

According to reports, two soldiers and two civilians were killed when terrorists ambushed army vehicles in the Baramulla district of Jammu and Kashmir.

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Leader of Opposition in the Lok Sabha and Congress leader Rahul Gandhi on Friday slammed Prime Minister Narendra Modi-led central government over the recent terror attacks in Jammu and Kashmir.

The former Congress chief said that the NDA government’s policies have failed to establish security and peace in the valley.

“Contrary to their claims, the reality is that the J&K is living under the shadow of danger due to repeated terrorist activities, attacks on our soldiers and targeted killings of civilians,” Gandhi said in a post in Hindi on X.

The Congress leader asked the government to immediately take accountability and restore peace in the valley at the earliest and ensure the safety of the army and civilians.

Expressing his condolences, the Congress leader said: “The news of the martyrdom of our brave soldiers in the cowardly attack on an army vehicle in Gulmarg, Jammu and Kashmir is extremely sad.” Two porters also lost their lives in the attack, he added.

According to reports, two soldiers and two civilians were killed when terrorists ambushed army vehicles in the Baramulla district of Jammu and Kashmir.

Officials stated that a convoy transporting personnel from a Rashtriya Rifles unit, along with civilian porters, was en route to the Nagin post in the Afrawat range. The attack occurred when terrorists opened fire on two army trucks at Botapathri, approximately 6 kilometers from the tourist destination of Gulmarg.

National Conference president Farooq Abdullah also condemned the terrorist attack and said attacks like the one in Gulmarg would continue to occur until India and Pakistan found a way to be friends and that would end J&K’s troubles.

Speaking to reporters, Abdullah said: “Such attacks will continue to take place in this state. You know where they come from and it will not stop until some way is found to get out of this trouble. I have been witnessing it for the last 30 years, innocent people are getting killed.”

“We are not going to become a part of Pakistan. So, why are they doing this? To disrupt our future? To make us poorer?” he said.

Union Home Minister Amit Shah had on October 20 condemned the recent terror attack, in which two labourers were killed in Gagangir area of the Ganderbal district.

In a post on X, he said: “The dastardly terror attack on civilians in Gagangir, J&K, is a despicable act of cowardice. Those involved in this heinous act will not be spared and will face the harshest response from our security forces. At this moment of immense grief, I extend my sincerest condolences to the families of the deceased. Praying for the speedy recovery of those injured.”

Despite the Home Minister’s appeal, on October 24, seven people, including six non-local labourers and a local doctor, were killed in Kashmir’s Ganderbal district. The terror attack occurred when terrorists opened fire at the victims at the Z-Morh tunnel construction site.

Earlier on October 18, a labourer from Bihar was found dead in the Shopian district. His bullet-riddled body was found in the Wachi area of Zainapora.

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Cyclone Dana: West Bengal CM Mamata Banerjee says around 2 lakh people moved to relief camps, one dead

IMD added that isolated extremely heavy rainfall is expected over coastal Odisha and south Gangetic West Bengal (east & west Medinipur) on October 25.

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West Bengal Chief Minister Mamata Banerjee on Friday said around 2.16 lakh people have been evacuated from affected areas to relief camps, adding that one person has died during Cyclone Dana.

Addressing a press conference, Banerjee said some districts were affected badly after Cyclone Dana hit the areas here, especially ‘kaccha’ houses. She said all District Magistrates, police officers and concerned officials have been doing their best and the government coordinating with all of them from time to time.

“2.16 lakh people evacuated from affected areas to relief camps. I talked to an MLA, he informed me that Kapil Muni Mandir has been affected and faced massive waterlogging. I talked to all MLAs of affected districts,” she said.

On Thursday, Banerjee was personally overseeing every move from the State Emergency Operation Centre in Nabanna, ahead of Cyclone Dana.

India Meteorological Department (IMD) has stated that Cyclone Dana crossed the north Odisha coast as a severe cyclonic storm with a wind speed of 100-110 kmph gusting to 120 kmph. Isolated extremely heavy rainfall is highly likely over south Gangetic West Bengal, specifically in east and west Medinipur today.

The severe cyclonic storm Dana made landfall close to Habalikhati Nature Camp (Bhitarkanika) and Dhamara between 0130 hrs IST to 0330 hrs IST on October 25, with wind speeds of 100-110 kmph gusting to 120 kmph, said IMD.

IMD added that isolated extremely heavy rainfall is expected over coastal Odisha and south Gangetic West Bengal (east & west Medinipur) on October 25.

NDRF DIG Mohsen Shahedi said, “Reports are being compiled from the field by the SOC and shortly we will have the details. The normal services have also been restored. The air services have been resumed.”

Flight operations have now resumed at Netaji Subhash Chandra Bose International Airport in Kolkata. These services were previously suspended due to the effects of Cyclone Dana. Rains are being experienced in various parts of West Bengal as a result of the cyclonic activity.

Odisha Chief Minister Mohan Charan Majhi said that Cyclone Dana made landfall at midnight on the 24 and 25 October. During the landfall, the windspeed was 82-100 km/hour, he added.

“There has been no report of any casualty anywhere. We have achieved the target of zero casualty due to proper planning and execution. We have shifted more than 6 lakh people to safer places. Airport services have become normal. The first flight landed in Bhubaneswar at 9 am and all the road blockage will be cleared by 1 pm today,” the Chief Minister said.

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Congress says inequality, inflation structurally corrosive to India’s long-term growth prospects

“These rates have fallen from 33.4 per cent (2004-2014) to 28.7 per cent (2014-2023),” he said.

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Urging the government to address concerns over the growing financialisation of the Indian economy, the Congress asserted on Friday that inequality, wage stagnation and inflation were structurally corrosive to India’s long-term growth prospects.

Highlighting these issues through a social media post on X, Congress communications general secretary Jairam Ramesh emphasised the critical need to boost private investment rates in order to sustain higher economic growth, which has declined from 33.4% (2004-2014) to 28.7% (2014-2023).

“These rates have fallen from 33.4 per cent (2004-2014) to 28.7 per cent (2014-2023),” he said.

Referring to an article by a notable public finance economist, Ramesh expressed additional concerns. He pointed out that the share of passive income in total reported income has increased significantly, from 16% in 2016-17 to 24% in 2023-2024.

Moreover, for the corporate sector, the share of passive income outside of operating profits surged from 16.6% to 30.7% during the same period.

This rise in passive income illustrates a shift in corporate focus towards financial investments over productivity-raising physical investments, propelled by the decline in physical investments due to muted post-Covid demand.

Ramesh emphasised that these structural issues, including inequality, wage stagnation, and inflation, extend beyond politics and can erode India’s long-term growth prospects significantly.

“Inequality, wage stagnation, and inflation are not just political issues — they are structurally corrosive to India’s long-term growth prospects,” he said. 

 He stressed that it is crucial for both the government and its chief economic advisor to acknowledge and address the growing financialisation of the Indian economy.

“If not the opposition, the government must listen to its own chief economic advisor, who has himself raised alarm over the growing financialisation of the Indian economy,” the Congress leader said.

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