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 ten.
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 recoverable."
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 thrive.
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 stands out.
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.
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 kind-hearted professor.
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 urban poor.)
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 each other?
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.