It’s a rich man’s world

Why has the hyped-up growth rate not touched the farmer on the ground?

Paranjoy Guha Thakurta Delhi

The controversy over the establishment of a slew of special economic zones (SEZs) has its origins in the agrarian crisis in large parts of the country. It has been argued that the fertile farm land that would be used to set up these SEZs comprise only a minuscule proportion of the total cropped area in India and that the phenomenon of industrial units coming up on agricultural land is an ‘inevitable’ aspect of economic development the world over. Such arguments evade the real issues.

A substantial section of the Indian farming community has not really benefitted from the policies of economic liberalisation that have been followed by successive Union governments over the last 15 years. On the contrary, many farmers in the country are far worse-off today in comparison with where they were in the late-1980s. Here’s what Prime Minister Manmohan Singh himself had to say on October 18,  while addressing a conference organised by the Federation of Indian Chambers of Commerce and Industry: “The more I travel to interior areas and meet farmers, I get the feeling that in many parts agriculture is being carried out in adverse conditions. The problems may be attributable to a wide range of causes but the end result is that there are large tracts where farmers seem to be in acute distress.”

The point is simple. In recent years, whereas the industrial and the services sectors have been growing at between eight per cent and twelve per cent each year, agricultural production has increased by barely two per cent. While the share of the farm sector in the country’s gross domestic product has come down from around 40 per cent to 20 per cent over the last 15 years, the share of the population that is dependent on agriculture for their livelihood has decreased at a relatively slow pace in this period—from roughly 70 per cent to 60 per cent.

Given the severe agrarian crisis in many parts of India—a manifestation of which is the widespread incidence of farmers’ suicide in large numbers—it is hardly surprising that farmers should be reluctant to part with their land at prices that are a fraction of the prevailing market prices. As news came in about large corporate groups being actively assisted by the state governments of Haryana, Punjab and Maharashtra to acquire agricultural land at ridiculously low prices (often as low as one-tenth their market prices), questions have come up about whether the provisions of land-acquisition laws were being misused for private profit, while completely bypassing public benefit.

State governments are playing the role that brokers play in land and real estate transactions. They are buying the land cheap for private developers. Few had any doubts that many of these deals were not exactly above board.

Besides, the so-called reforms initiated by Manmohan Singh, then as finance minister in the Narasimha Rao regime, have only resulted in serious economic inequality and regional imbalances. Despite the high growth rate, the gap between the rich and the poor, the urban and the rural and India and Bharat has onley widened.

Besides, why, for instance, is the Centre not initiating SEZ ‘role models’ in poor and backward states like Bihar, Assam, Uttar Pradesh, Madhya Pradesh and others? Why are SEZs being opened only in prosperous states like Maharashtra and Haryana? This process of dichotomy will only create regional imbalances, a sea of deprivation and social conflict in an already fragmented society.