Rural Distress or The Want Of It?

Past week of news on census findings have been quite interesting to say the least. First, we had the sensational findings of the census on URGD (Urban Rural Growth Differential). On 27th of September, The Hindu reported:

The 2011 Census captures only the tip of an iceberg in terms of rural upheaval. The last time urban India added more numbers to its population than rural India was 90 years ago and that followed giant calamities in public health and war. Yet, without such conditions, urban India added 91 million to its 2001 total, against rural India’s 90.6 million.

Table Depicting Rural and Urban Population Differentials

Table Depicting Rural and Urban Population Differentials. Courtesy: The Hindu

Also see table for more. P Sainath, the very next day, published in The Hindu an op-ed which translated the census of India findings into rural distress. To quote him from his op-ed on 28th September:

The re-classification of villages and towns, and the changes this brings to the nation’s rural-urban profile, happens every decade. Yet only Census 2011 shows us a huge turnaround, with urban India adding more people (91 million) than rural India (90.6 million) for the first time in 90 years. Clearly, something huge has happened in the last 10 years that drives those numbers. And that is: huge, uncharted migrations of people seeking work as farming collapses. We may be looking at — and missing — this cruel drama in the countryside. A drama of millions leaving their homes in search of jobs that are not there. Of villages swiftly losing able-bodied adults, leaving behind the old, hungry and vulnerable. Of families that break up as their members head in diverse directions.

From these conclusions, we are forced to ask a very important question.

7 years of the past decade was under UPA rule and during this time, congress implemented NREGS (National Rural Employment Guarantee Scheme) which found a great acceptance from many including Mr. Sainath himself [1st September 2009, 14th September 2009, 11th August 2010]. NREGS was precisely to address the rural issues, which to put it in INC’s and Communist’s words, from NDA’s neglect for rural growth. In fact, if we go back to past two-three years’ op-eds  written by P Sainath and many other eminences in various national newspapers, it would seem that NREGS is the best thing that happened to India after Independence. Obviously, the question is “whither results of NREGS, the path to eradicating poverty in rural India?”

It is really unfortunate that several public policy commentators who keep harping that “the only answer to all problems India is facing is more liberalization of economy”, we heard little dissent, objection or at least criticism of P Sainath’s observation. The questions that should arise from numbers posted by Census and P Sainath’s opinion, logically, are :

  1. If P Sainath’s theory – “decade of rural distress” – is correct, then would it be fair to say that almost 6 years of investment by GoI into NREGS is a total waste?
  2. If P Sainath’s theory is wrong, how do the numbers explain the current unemployment situation?

To answer these questions, let us look at some more numbers from agriculture industry, which actually contradict P Sainath’s theory:

  • Rice Production:
    • Hits a record maximum in 2008 at 99.18 Mil Tonnes
    • Declines to 89.13 Mil Tonnes in 2009-2010
    • Supposed to hit 100 Mil Tonnes as Monsoon was on time and good. But recent updates indicate that it may fall 15 Mil short due to transportation delays
    • Sources – 1, 2, 3, 4
  • Wheat Production:
    • 80.58 Mil Tonnes in 2008-09
    • Falls to 79 Mil Tonnes in 2009-10
    • Expected to hit all time high in 2010-11
    • Sources – 1, 2, 3, 4 (4 is a Recommended read)
  • Cotton Production:
    • 309 Lakh bales (= 5.4075 Mil Tonnes) in 2008-09
    • 295 Lakh bales in 2009-10
    • 325 Lakh bales in 2010-11
    • Estimated to reach 450 Lakh bales in 2013
    • Sources – 1, 2, 3
  • Situation in 2010-11 is even better if you go by this moneycontrol.com report. Please underline the word “bumper”

The numbers are puzzling, given Census of India findings. If we go by P Sainath’s logic behind URGD numbers, production of all these commodities should have come down! After all when there are people displacing from rural to urban areas, one should expect that production of food grains and other commodities to come down. Why is it not happening? Are the number forged? We know for sure that 2009 saw one of the worst Sugar production scam. BJP raised questions on this in LS, even stalled LS on the matter. Sharad Pawar never answered. Later as nation was struck by some or the other problem continuously, the matter was left under the carpet. So coming back to questions 1 and 2,

NREGS has failed miserably. This much is clear from the numbers. If NREGS were working, it should have brought back all those who displaced during the NDA rule from rural areas to urban areas, back to their home villages and their older professions. After all, GoI has been funding NREGS since 2005 as its flagship project. Currently, almost 1 lakh crore is being pumped into NREGS project every year by GoI. This, however, doesnt necessarily mean the agrarian crisis is unreal.

So what do the numbers explain? These numbers might mean that consolidation of small farm holdings into large farm holdings is in progress. Output is steady, except when India was hit by drought. So, it may not be that agricultural land has come down drastically either. The resulting displacement of farmers from rural areas to urban areas is certainly in search of work and livelihood. The core of the problem is then – “why are they being left disappointed?

Let us for a moment, look in another direction : “who buys most of the produce from the Indian farmers?”. Answer is Indian Government. GoI not only buys most of the produce, it also decides the export cap. Several uncomfortable questions arise here:

  • If the buyer is able to give fair price to Indian farmer even while buying a huge chunk of the produce, why is Indian farmer still dying?
  • Despite GoI’s shoddy performance shrouded in fair price and social justice, why is Indian farmer able to produce so much?
  • If Indian farmer is able to produce so much, why is there is a surge in URGD?

Let us be clear about one thing – URGD surge is not “necessarily” bad. Historically, people have moved from rural areas to urban areas in search of work, better entrepreneurial opportunities, change in profession etc. By P Sainath’s own admission, this is nothing new. When a farmer moves to an urban area in search of work and gets cheated, he looses hope and is left disappointed. That is the reason why he would go back to his village for some time and return in search of work again and again. It only suits P Sainath and makers of Swades to tell the story of a Haridas in a remote village and make every citizen of India feel to be the reason for the plight of the farmer. Fact is people like those mentioned by P Sainath, like Haridas in Swades, get cheated by contractors in ubran areas because these contractors can escape our judicial system easily.

The obvious question then is “how to change the situation?”. The answer lies in justice – faster, simpler, cheaper and easily accessible. Even the worst critics of past decade of Gujarat growth story were awestruck at how Gujarat evening courts have done a lot of good for the people. In the words of CNN IBN – “Ray of Hope“, SC judge Ashok Bhan – “Evening Courts in Gujarat a success“, Indian Bar Council – “priases Gujarat’s judicial delivery system“. Since, evening courts were basically designed to look at petty issues like the ones normally seen in urban scenarios – for instance: issues with daily wages, promised reimbursement or such smaller disputes among laborers and contractors. This is the reason why when looking at past decade of India’s story – population, economy, social conditions etc., we must take a look at parameters of India in comparison with those of Gujarat. Even in agriculture sector, Gujarat has been doing exceptionally well just like how well industrial sector has been doing. The most intriguing aspect of past decade of Gujarat’s growth story is

Modi didnt comproise policy for either agricultural growth or industrial growth. He seems to have struck a balance between the two. While Gujarat saw phenomenal agricultural growth, industrial growth has been equally exceptional – both during the same decade that P Sainath wants to call “decade of rural distress”

Even during recession, when Surat Diamond market was hit by recession, Modi refused to dole out sops. Modi, in fact asked diamond industry workers to use Gram Rojgar Yojana which primarily emphasizes on skill upgradation, which is a vital aspect of urban employment. Unfortunately, in several others states, especially those mentioned by P Sainath in his opinion piece, such programmes where emphasis on skill upgradation, employment generation, capacity building etc., have been missing through the decade. Lack of education of the people moving into urban areas in search of work about skills required to sustain is one of the most important reason why they cant cope up. Couple it with lack of swift and cheap justice delivery, they will further dive down into hopelessness. Gujarat did both – improved justice delivery and executed skill upgradation programmes. Thats why a comparison between URGD numbers in India with those of Gujarat in past decade will provide us the required perspective.

The economic reforms process should continue, but on the sidelines of this process, judicial system must be strengthened. While economic reforms will ensure job creation, quick justice delivery will give confidence to the poor farmers who are being cheated day in and day out by the GoI and labor contractors. Ironically, GoI promises fair price to every farmer while buying his produce but is unable to provide space for grain storage in Government Granaries.

It has to be accepted that BJP’s commitment for economic reforms is noteworthy. BJP has shown this in the states where BJP is leading the government. Success models like the evening courts, alternate skill development programmes in Gujarat must be adapted according to local requirements so that people moving from rural areas to urban areas in search of work are not left dangling with no future. Karnataka’s move to introduce special agriculture budget shows BJP’s commitment to not just reforms but also to ensure that the population drain from rural areas doesnt effect agriculture negatively. URGD numbers will increase further as India moves further toward urbanization. UPA 2.0 literally destroyed the confidence of people in our own potential through its trademark programmes like NREGS. Clearly agricultural produce is not going down. However, returns to the farmers have not been consistent, thanks to ad-hoc export caps, mismanagement of government granaries, shoddy customs watch, etc. To call the surge in URGD as “rural distress” is like shooting at the sky hoping to hit the bird!

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