Bridging the gap between the two Indias

Despite its weaknesses and flaws, the UPA government's loan waiver has managed to bring agriculture on the centre stage of India's political discourse. Only a collective effort by political parties and opinion makers can now ensure that it remains there till the gap between India and Bharat fades away

Pranay Sharma Delhi

Most people like success stories, especially when they are about their country. The steady growth of the Indian economy at nine per cent every year, the growing number of billionaires, some of them among the 10 richest people in the world, are the kind of tales a large number of Indians love and the country's elite and mainstream media never tire of telling them. Feel-good stories, they say, encourage people; they help in raising the hopes and meeting the aspirations of a large section of Indians.
But there are even larger numbers of Indians whose stories are seldom told. They are the ones who live in villages and in remote corners of rural India. They rarely have a success story to narrate. Most of their tales are of woes, of hunger and poverty, of starvation and suicide.
Some say we live in two countries - India and Bharat. The former is the one where the success stories lie, while the latter only has failures and disappointments. The gap between the two continues to increase as India marches forward, leaving Bharat far behind.
Most experts acknowledge that just as the superior performance of the aggregate Indian economy is now beyond question, equally beyond question is the fact that inequality in India is also growing. "It is unpardonable that an economy that is doing so well overall has somewhere between 220 to 280 million people living below the poverty line," economist Kaushik Basu observed in a recent article.
An attempt, perhaps, is now being made to pull those out of poverty and bridge the yawning gap between urban and rural India. The Rs 60,000 crore loan waiver package announced by the Congress-led United Progressive Alliance government to extend a helping hand to nearly four crore poor and marginal farmers in the country can be seen as a move in that direction.
The political opponents of the ruling UPA coalition have dismissed the move as a "gimmick" aimed at wooing the rural poor before the elections that are due early next year. Others have hailed the move but have spoken about its inadequacies. The method used in identifying poor and marginal farmers who qualify for the waiver has been based purely on their land-holdings. No attempt has been made to differentiate the categories of land into arid, semi-arid or irrigated. Many of the farmers who have been left out because of their larger land-holdings depend heavily on the rains for their crops. Quite a few of them are from areas that have had the highest number of farmers' suicides in the country.
Others have argued that the loans that are being waived by the government are mainly from the banks and other financial institutions. But a large number of families in rural India also depend heavily on loans from privates sources like money-lenders, traders and relatives. Rough estimates show that this amount is over Rs 50,000 crore and the steep interest rates that they pay for the loans run into nearly Rs 30,000 crores.
Most of these loans are taken for non-farming activities. Much of it goes for medical expenses and in other household costs. According to a World Bank report, nearly a quarter of Indians hospitalised in a single year fall below the poverty line. This means that it is the 'poorest of the poor' that spend the maximum, selling off most of their assets to get medical help.
The government's loan waivers come with a series of other policies that include insurance and medical cover for the poor and marginal farmers and a proposed smart card that will provide them with food grains at much lower prices than what is available in the market. In addition, it has also introduced the National Rural Employment Guarantee Scheme, which from April is being extended to all the districts in the country and under which all rural families will be assured at least 100 days of employment in a year.
It is interesting to note that though the employment guarantee scheme was introduced some years back, most state governments, irrespective of their political affiliations, have failed miserably in taking advantage of it. Studies show that in most of states only 40 per cent of the scheme had been utilised. This means that most rural families in the country had been deprived of at least 60 per cent of their income due to apathy and inefficiencies of state governments.
Concerns have also been raised from some quarters over multinationals' attempts to take control of agricultural farmland by gradually easing out the rural poor. Yet others have argued the need for weaning away most of the 60 per cent and more people of the population that continues to depend on agriculture for livelihood into other sources of income.
None of the issues has easy answers. But despite its weaknesses and flaws, the loan waiver has managed to bring agriculture on the centre stage of India's political discourse. Only a collective effort by political parties and opinion makers in the country can now ensure that it remains there till the gap between India and Bharat fades away.