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Farm subsidy to loan waivers: A race to compensate farmers for their losses

12 9 32

With elections approaching, every party is swearing by farmers and trying to woo them for their votes. The Modi government has already announced a package of Rs 75,000 crore for about 12.6 crore small and marginal farmers. While in absolute terms it looks sizeable, when it is divided by the number of farm families to be covered, it is miniscule—just `6,000 per family per year, which is about 6% of their annual income. This level of support, unless augmented further, may not go far to win farmers’ confidence. Majority would agree that farmers have been under stress for quite some time, and have not got justice so far.

While the Modi government claims that its record of overall growth (GDP) is better than the UPA government (notwithstanding the suspicion that many have on the GDP revised series), the nature of growth matters as well. In a country where 47% of the workforce is engaged in agriculture, it is the growth of agri-GDP that is even more critical for the alleviation of poverty and providing nutritious food. The average annual agri-GDP growth in the first four years of Modi government, for which data is available, is just 2.5% compared to 5.2% in the last four years of Manmohan Singh’s government. The exports of agri-produce have fallen since the peak of $42.5 billion achieved in 2013-14, giving a negative growth in agri-exports during the Modi period.

On the other hand, agri-imports have consistently increased, reducing the net export surplus (exports minus imports)........

© The Financial Express