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The Weakest Link: Among The Modi Government's Many Hits Was One Crucial Miss - Agriculture

The document discusses India's economic reforms and identifies agriculture as the "weakest link" for the Modi government. It notes that while poverty halved under the reforms, it took 18 years compared to just 6 years in China. China prioritized agriculture in its early reforms, abandoning communes and increasing pricing freedoms for farmers, which doubled incomes and halved rural poverty within 6 years. This agricultural success fueled industrial growth. However, India's reforms began from the top down without sufficiently addressing agriculture. If Modi focuses on irrigation, research, and a national market for agriculture, it could have large political and economic payoffs by supporting farmers and ensuring sustainable growth, as seen by the success of BJP chief ministers in agricultural

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34 views2 pages

The Weakest Link: Among The Modi Government's Many Hits Was One Crucial Miss - Agriculture

The document discusses India's economic reforms and identifies agriculture as the "weakest link" for the Modi government. It notes that while poverty halved under the reforms, it took 18 years compared to just 6 years in China. China prioritized agriculture in its early reforms, abandoning communes and increasing pricing freedoms for farmers, which doubled incomes and halved rural poverty within 6 years. This agricultural success fueled industrial growth. However, India's reforms began from the top down without sufficiently addressing agriculture. If Modi focuses on irrigation, research, and a national market for agriculture, it could have large political and economic payoffs by supporting farmers and ensuring sustainable growth, as seen by the success of BJP chief ministers in agricultural

Uploaded by

dineshjain11
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The weakest link

Among the Modi governments many hits was one crucial miss agriculture.
Indias reforms started with stealth, and started from the top. It benefited those better off more. Poverty
halved, but it took 18 years, compared to just six years in China.
Written by Ashok Gulati | Published on:May 25, 2015 12:00 am

The programme could be a game changer if combined with Aadhaar and mobiles (JAM), and if
most subsidies are directly transferred to the accounts of beneficiaries, as already done in the case
of the gas subsidy. Three recently launched schemes the Pradhan Mantri Suraksha Bima Yojana,
the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Atal Pension Yojana could together be a
major leap in strengthening social security of the masses in the unorganised sector.
There must, of course, be many other hits, especially in socio-political mobilisations like
the Swachh Bharat Abhiyan and in the BJPs membership crossing 10 crore. But let us focus on the
economy here.
What is the Modi sarkars biggest miss? It is agriculture and increasing farmer distress. There have
been two bad seasons, and if the third also goes out of gear, the Modi sarkar may be in for trouble.
Raising insurance compensation without putting the insurance system on a strong footing is not
going to help much. Neither will soil health cards, if the current system of subsidies is not
rationalised.
While Modi made significant strides during his visit to China, landing 26 business deals worth $22
billion, none of of these was related to agriculture. But the biggest lesson that the Modi sarkar could
learn from the China visit lies in agriculture. China produces more than 600 million tonnes of
foodgrain, compared to Indias 251 million tonnes in FY2015, from a cropped area that is less than
Indias and with a holding size that is almost half of Indias (1.15 hectares).
Moreover, it is important for Indian policymakers to know that China started its economic reforms
with agriculture, not industry. During 1978-84, the period which marks the beginning of Chinas
economic reforms, the country abandoned the commune system and graduated to the household
responsibility system in land. This is well known. What is not known widely is that China also
liberated controls on agriculture pricing to a large extent. As a result, its agriculture grew by 7.1 per
cent per annum, while farm incomes increased by 14 per cent per annually, and rural poverty halved
in the six years between 78 and 84.
It is this firing from the bottom, or starting with agriculture, that gave political legitimacy to
economic reforms in China, as it benefited the largest number of people. This unprecedented rise in
rural incomes also created huge demand for simple industrial products, ranging from televisions

and toys to refrigerators. And this opportunity was grabbed by town and village enterprises, which
led

to

the

manufacturing revolution

in

China.

The

rest

is

history.

Indias reforms started with stealth, and started from the top, correcting exchange rates and
industrial licensing etc. It benefited those better off more. Poverty halved, but it took 18 years
(1993-2011), compared to just six years in China, as India had to rely on the trickle-down effect.
Investment in agriculture, especially irrigation, research and development in thissector, and one
common all-India market, are critical. These will have high payoffs, politically and economically.
Remember, the three BJP chief ministers who came back to power three

times in a row (in Gujarat, Madhya Pradesh and Chhattisgarh) all


headed states where agricultural GDP grew at more than 7 per cent
per annum over a decade, that is, from 2001-02 to 2011-12. Nobody
knows this better than Modi himself, as he has harvested the biggest
political crop from it. If only he would now focus on this weakest link,
and make sure that Indias growth story is put on a sustainable
trajectory.
The writer is Infosys chair professor for agriculture at Icrier.

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