The Rs 60,000 crore loan waiver for farmers without addressing their problems is no more than a brazen attempt to fool the people

When Railway Minister Lalu Prasad Yadav was presenting his Railway Budget, even the 'stern' Speaker could not stop laughing at his one-liners. For many Members of Parliament the image of 'Mungeri Lal' spinning his dream recurred repeatedly. An in-depth inquiry into Mr Yadav's claims to turn around the fortunes of the Indian Railways would confirm that his critics were not off the mark.

Two days later the cat was out of the bag. Even before Finance Minister P Chidambaram presented his Budget, the Economic Survey revealed the slowdown of the economic growth: Industry from 11.6 per cent to nine per cent in 2007-08; agriculture from 3.8 per cent to 2.6 per cent; bank credit from 30.8 per cent to 21.8 per cent; exports from 25.3 per cent to 7.7 per cent; and, finally, the economy itself from 9.6 per cent to 8.7 per cent.

Compare this mediocre performance with what Mr Chidambaram said in the Budget speech: The UPA Government, he said, "has delivered on the promise of growth and will deliver on making the promise of growth more inclusive". This time, faced with slowdown in growth, he was repeatedly referring to the UPA's programme to make the growth more 'inclusive' - a subtle change of emphasis to hide his Government's failures.

As for the economic growth, the growth curve started going up sharply ever since the Narasimha Rao Government dumped the Nehru-Gandhi socialist policy in favour of liberalisation and letting people make their own investment decisions. Releasing key economic sectors like telecommunications, financial system, trade, investment, etc, from bureaucratic control meant a burst of people's energy.

Since 2000, the NDA Government moved to facilitate massive investment in infrastructure projects like roads, railways, ports, power, transportation, telecommunications, etc. No wonder in 2003-04, India's economic growth rate was 8.5 per cent. For the Railways, it meant a complete break from slow growth of revenue generating freight traffic of the past.

Critics advise us to look at the total cargo on offer for the last several years and compare the share of the Railways with that of the roadways for an understanding of Mr Yadav's hyperbolic claims. Combined cargo in 2001-02 was 2,046 million tonnes and the Railways share was 24.07 per cent. By 2006-07, it came down to 21.01 per cent, though in absolute terms it went up from 492 million tonnes to 728 million tonnes. The Railways had full support of the Government, while roadways were facing many problems due to steep rise in fuel price, delay in expressway construction and insurgency in the North-East.

This takes us to Mr Chidambaram's performance. The Economic Survey suggests that many reforms could not be implemented due to the Left's pressure. Some of these reforms are: Privatisation of old coal mines; de-controlling sugar, fertilisers, pharma segments; allowing 100 per cent FDI in Greenfield rural-agri banks; permitting 51 per cent FDI in rural insurance, health, weather, etc; extending working week in seasonal industries; allowing foreign equity in retail trade; permitting corporate investment in nuclear power; making open access a reality in the power sector, etc.

Significantly, Mr Chidambaram remained silent on this issue in his Budget speech. So whom does he seek to mislead by recounting larger allocations and chanting growth mantras?

Mr Chidambaram, in contrast, focussed on loan waiver for farmers up to Rs 60,000 crore. However, this was not the first Government to announce such a waiver. In 1989, Mr VP Singh announced a loan waiver up to Rs 10,000 for a farmer. Mr Chidambaram's waiver applies only to loans taken from the banks. What about those taken from private sources like moneylenders? The number of registered moneylenders has increased from 12,000 to 20,000 in the past few years, despite the Finance Minister's claims that the credit to farmers has been doubled. The Government's figures show that about 46 per cent of the farm credit comes from private sources.

The issue, therefore, is not providing loans to farmers but increasing their incomes. Here the weakest link is the absence of smart supply chains and lack of communication between farmers and consumers. This aspect remains untouched in the Budget. Won't the same farmers queue up the next year, too, for another waiver if their basic problems remain untouched?

If the loan waiver without attending to basic problems of farming economy is one such trapeze show, another is the Railway Minister's announcement of absorbing railway station porters into regular railway service. Here again the basic problem is the unscientific and hazardous manner in which personal baggage is carried in our railway stations. So why not introduce trolleys to carry the baggage? The Railways could also have instituted a health insurance, gratuity with a partial funding from the Government and other welfare schemes. Mr Yadav did not pay attention to these measures as they won't catch headlines.

This is the way the UPA Government looks into the affairs of governance: Ignore the basic issues and throw up attractive palliatives. So, at the end of the year, there is no real change in the lifestyle of the people - the poor remaining poor and the rich becoming richer.

Courtesy: www.dailypioneer.com, March 07, 2008