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Recommended
reading for P Chidambaram
 Newspaper
articles are seldom scanned for incondite and incongruous recipes.
They are read for perception and referred to for that purpose only.
However, avoirdupois of the author could make a difference. More so,
if it is a heavy weight with footprints left in policy-making
stretches. P Chidambaram is an example. Hark, the former union
finance minister promised regular intellectual pabulum. He should be
speaking with authority. Being the architect of two budgets.
Chidambaram’s opening ball took aim at the Indian agriculture. His
rediscovery of rural Indians spelt in catechism with the agility of
a VIP diving into the cool waters of a five star swimming pool. He
surfaces with crumbs of evidence to prove his point that India is
poor because its outback is so. His cerebral ambience triggers into
memory the famous words from the fictional detective Sherlock
Homes.. Elementary, Dr.Watson.
As finance minister Chidambaram moved budgets and spoke on policy
matters. A brilliant lawyer, he showcases the points he made. But
the tenderness for the farming folk now oozing was nowhere to be
seen then. The terms of trade had long gone against farms and
farmers. The question of correcting that imbalance never in the past
bothered him (and others).
Even the first five-year plan was weighted against agriculture. By
design or accident that bias persisted. The late Prof.B.R.Shenoy was
among the first to finger point the tilt. The huge dams and the
hydroelectric projects favoured the industry not agriculture, he
said.
The grain imports under PL-480 took a sledgehammer to the farmer’s
nest egg. The adverse terms of trade against agriculture reached a
point of no return. The prevailing famine conditions muted
criticism. Around that time however, Rajaji, as chief minister of
Madras and quoting Lenin, called for the need of a strong peasantry
in every scheme of economic development.
Step by step agriculture was reduced to a mildewed stuff. Only lip
service there after. The lone exception was Charan Singh. He was
crying foul all alone with none paying heed. But when a chance came
he did not let it go. His greatest achievement was a full-throated
presentation of the deteriorating terms of trade of the Indian
agriculture.
His cannonading of the earlier economic policies came in the reply
to the debate on his budget. For the first time a sincere effort was
officially made to quantify the huge losses incurred by the farm
sector in the name of industrial development. He relentlessly made
the point that industrial India and its glittering cities and shabby
slums were built on the back of the country’s farming community.
That single speech earns the late Charan Singh a niche in India’s
economic history. And also filled a blank in New Delhi’s policy
framework. It was a sparkling performance not bettered by any one
either before or after him.
Unfortunately, we don’t have before us a copy of the speech. We
would otherwise have reproduced passages at least to call
Chidambaram’s bluff. And to drive home the point how he, Charan
Singh, thus dwarfed or others as finance minister. In decoding the
bellows from the barn fields.
But Charan Singh was unlucky. The political equations were against
him. To show that he was doing something, he had pencilled in a slew
of imposts on everything not included in the farmers’ consumer
basket. Awaiting him was powder-keg of inflationary pressures. His
was the spark. Prices shot up. With WPI breaching that sensitive
100-mark. Charan Singh was impaled for feeding inflation.
Chidambaram’s dependence on basic arithmetic is striking. If he
really wanted to size up that the economic injustice perpetrated on
rural India his catechism won’t help. He must re-work (for later
years) the figures Charan Singh marshalled. The unaccounted wealth
legalised by Chidambaram through VIDS was only a fraction of the sum
the countryside has lost over the years in adverse terms of
trade.
Indeed the picture is now complicated. Black money has become legal
tender. The speculative interest in shares and securities also
thrived on the plight of farmers. The unravelling of co-operative
banks are an example. Exports are measly. Mauritius based paper
companies playing the equity market took home huge profits with the
finance ministers looking purposely away. Where all those money came
from? The question of terms of trade and its impact on rural India
was eventually ignored. Official seminars and other shindings
religiously avoided the issue. Only recently a mention of it was
made by Montok Singh Ahluvalia, former finance secretary now at the
planning commission. He did so not on a policy plank but at a casual
chat with the media. He conceded that the farmers were at the
receiving end and hinted at some feeble efforts being made in
atonement.
Figures speak for themselves. Let us leave aside Charan Singh’s
estimate and their possible extrapolations. The share of agriculture
has seen a progressive decline as a percentage of plan outlays. It
was only 4.5 per cent of the total in the ninth five-year plan as
against 5.1 per cent in the eighth plan.
The allocation to rural development was to rise to 8.7 per cent of
the total outlay from 8.3 per cent of the eighth plan. In the first
four years of the ninth plan only 6.7 per cent was spent. The gap
between the intended outlay and actual expenditure during every year
of the ninth plan fell short of the budgeted levels by more than 12
per cent. The slippage about nine per cent for rural development and
14 per cent for irrigation. Animal husbandry received allocation
that was 24 per cent lower than the initial provisions. Elsewhere
the shortfall was about 18 per cent. Food storage and warehousing
received a meagre 1.6 per cent of the intended total. But the
actuals fell 25 per cent below the budget estimates. In the 02-03
budget estimate the share of rural development in total centre plan
outlay was scaled down to 5.5 per cent from 6.4 per cent in the
revised estimates or 01-02.
P Chidambaram, let us repeat, is no ordinary person. He is a legal
luminary who was the country’s economic commissar. So none would
dare say he lives in a fool’s paradise. But tell-tale
irrelevancies are hard to escape even untaught attention. The shift
away from agriculture is fundamental. If the former finance minister
thinks it can be set aright by collecting a rupee of two on the sale
a kg of sugar or rice he needs to be heard more. His pedestrian
start notwithstanding.
Being a lawyer Chidambaram would be interested in more exhibits. So
here is another one. India’s emergence has number one Asian
exporter of food grains made headlines recently. That distinction
also came at the cost of farmers. Despite all subsidies snorted at
by certain academic and media experts the gargantuan subsidies are
not making the Indian farmers richer. WTO had conceded that the
aggregate measure of support (AMS) to Indian agriculture is
negative. In other words the farm products are under priced. So the
country’s gain (from food grains export) is its farmers’ loss.
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