First food: business of taste
Good Food is First Food. It is not junk food. It is the food that connects nature and nutrition with livelihoods. This food is good for our health; it comes from the rich biodiversity of our regions; it
India
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A new era of agricultural renaissance begins
It's a significant budget in India's agricultural history because it addresses some of the key issues facing our small and marginal farmers today. So far, we had an uncoordinated and piecemeal approach to this big problem, but P Chidambaram has addressed it in a holistic manner now. For example, the debt waiver and one-time settlement is an important step for the revival of agricultural sector. Our name is in the mud today. We are called a country of farmer suicides and not Green Revolution. That is why I think Chidambaram has taken a very bold step to put small and marginal farmers back on the track. They were thrown out of the credit system so far. So this is a very important step. There is still a problem, though. According to the Economic Survey, nearly 42% of the debt is not from institutional sources. About 49% farmers are indebted, including 60% marginal farmers. Out of them 42% have taken money from moneylenders, traders and relatives. This waiver does not cover them, so you still have a problem at hand. Until our credit system and insurance systems are further improved, people will be still forced to go to moneylenders because our support is not holistic. If a farmer has committed suicide, his family might need money to pay for the doctor's fee and medicines. So they require consolidated support, and not fragmented support. This debt waiver is a good beginning for them. I think those farmers who are not covered under this scheme and have taken loans from moneylenders should be given smart cards by state governments with the help of the Central government. These smart cards should entitle them to inputs like seeds and fertilisers. It means if we can't waive their loans because of lack of verification, they can still get help for farming because they have some land. Now the second important malady of the Indian agriculture as diagnosed by the Economic Survey is the degeneration of natural resources. Chidambaram has mentioned that we must strengthen our soil testing laboratories. He has provided more funds and mobile testing soil vans. He has accelerated irrigation projects and is going to offer new national irrigation finance. Another very important budgetary provision is pricing of fertiliser on nutrient basis, not just on NPK. Plants need 14 nutrients. Therefore, he is providing subsidy on nutrients and not only on fertilisers on an experimental bases in Haryana and the Union Territory of Chandigarh. Thereby, he has taken a few steps to overcome the problem of natural resource degeneration. Thirdly, schemes on rural growth, rural education, communication and the National Rural Employment Guarantee Scheme will cover all the rural districts of India, which can be a very important source of income generation for the whole country. So all in all, I would say that a very serious beginning has been made to end the era of farmer suicides and to begin a new era of agricultural renaissance. There are also many other older schemes in places. All these schemes should work in convergence and synergy. They should not work in isolation. Now I think people have been awakened. The fact remains the approach to food security must be pan political because all of us need food.
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Chidambaram takes care of tigers
The declining tiger population in the country figured in the budget proposals for 2008-09 with the government announcing a special package for the conservation of the big cats. "The tiger is under grave threat,' Union Finance Minister P. Chidambaram said, while presenting the budget estimates in Parliament on Friday. Mr. Chidambaram said that in order to redouble the government's effort to protect the tiger, there was a special allocation of Rs.50 crore for the National Tiger Conservation Authority. The bulk of the grant would be used to raise a special armed Tiger Protection Force. In the last budget the Minister announced an expert committee to study the impact of climate change on India and identify the measures that would be taken in the future to deal with climate change. "Even while adhering to the principle of common but differentiated responsibility, we can and we must do a number of things in our self-interest,' he said, while advocating the need for promoting clean technology, reviewing fuel emission and efficiency regulations. He said India could replace wood with solar energy as the fuel of common use, and encourage the use of gas which is the most benign hydrocarbon.
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Rs 50 cr to save tigers
In a way, the Budget speech of the Union Finance Minister for 2008-2009 was unique. India's national animal tiger managed to find way in Chidambaram's speech when he recognised that the figure of 1411, the official number of tigers in the country, was alarming. "The number 1,411 should ring the alarm bells,' is how Chidambaram voiced his concern over the depleting number of tigers in the country as he announced a special grant to save the animal in the Budget 2008-09. Presenting a new ray of hope for the endangered specie, the finance minister proposed an allocation of Rs 50 crore to save the big cat by raising a tiger protection force. "1,411 is the number of tigers in India. The tiger is under grave threat,' the finance minister said, adding that the grant to the National Tiger Conservation Authority (NTCA) would redouble efforts to protect the big cat. Bulk of the grant will be used to raise, arm and deploy a special tiger protection force and this is one effort that the majority of tiger conservationists in the country have welcomed.
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2.5 cr more children to be covered
Finance minister P. Chidambaram today gave a brief account of the progress made under the flagship programmes such as Bharat Nirman, which were aimed at boosting development in the rural areas. In his Budget speech, Chidambaram proposed to provide Rs 31,280 crore for Bharat Nirman as against Rs 24,603 crore in 2007-08. The minister said Bharat Nirman had made impressive progress in 2007-08. "At the current pace, on each day of the year, 290 habitations are provided with drinking water and 17 habitations are connected through an all weather road. On each day of the year 52 villages are provided with telephones and 42 villages are electrified. On each day of the year 4,113 rural houses are completed,' he said. The Budget proposed Rs 8,000 crore for the Mid-day Meal Scheme. The Mid-day Meal Scheme would now be extended to upper primary classes in government and government-aided schools in all blocks of the country. This would benefit an additional 2.5 crore children, taking the total number of children covered under the scheme to 13.9 crore. The focus of the Sarv Siksha Abhiyan would shift from access and infrastructure at the primary level to enhancing retention, improving quality of learning and ensuring access to upper primary classes. He said the model school programme, which aims at establishing 6,000 high quality model schools, would start this year and Rs 650 crore had been proposed for the scheme. Navodaya vidyalayas would be established in 20 districts that had a large concentration of Scheduled Castes and Scheduled Tribes. On the National Means-cum-Merit Scholarship Scheme, which was announced last year to enable students to continue their education beyond Class VIII and up to Class XII, he said 1,00,000 scholarships would be awarded and a corpus of Rs 3,000 crore built up in four years. The finance minister said pointing out that India has the opportunity become a knowledge society, he said following the Prime Minister's announcement an IIM had started functioning at Shillong, IISERs had started at Mohali, Pune and Kolkata and an IIIT at Kanchipuram. Referring to the government's promise to establish a central university in the uncovered states, he said 16 central universities would be established in 2008-09.
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India bails out small farmers in pre-election budget
India's Congress-led government announced on Friday a 15 billion dollars loan bailout for small farmers in a populist pre-election budget targeting the party's traditional poor rural supporters. Finance minister Palaniappan Chidambaram, releasing the budget for the year starting April 1 as India's blistering economic growth has begun to slow, announced a 600 billion rupees ($15.05b) relief plan. Some 30 million indebted farmers' loans would be fully waived and another 10 million would receive aid, said Chidambaram, who presented the budget ahead of nine state elections slated this year followed by national polls in early 2009. He pledged to wrestle down the fiscal deficit and tame inflation. But the lack of any big corporate incentives along with the debt giveaway dismayed the stock market which tumbled nearly 1.4 per cent.
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Unemployment as a global economic malady
Unemployment is a common global economic malady, the level of which distintly varies between developed and under developed nations with Keynesian involuntary and frictional type in respect of developed nation and structural type as regard to under developed country like India which contributes to maximum growth of population and insignificant economic growth. Under employment or disguised employment has intensified its dimensions mainly in the rural sector where despite having capacity and willingness, persons fail to avail any gainful activities and as such job seekers out-number the job availability creating a major wastage of manpower. Unemployment in our country is partly due to overwhelming growth of population which has occurred in view of immigration from earstwhile East Pakistan and partially due to non-availability of land, less productivity, lack of industrial infrastructure, haphazard growth of educational institutions and expansion of education which is responsible for cropping up of new entrants in an already over crowded labour market. Agriculture being a seasonal activity fails to provide employment to rural masses throughout the year while perennial activity is not available in reality owing to excessive pressure of population. Exodus from rural areas coupled with slow pace of industrialisation has proved to be a constrain in providing employment opportunity to the growing urban population. Rapid expansion of general education mingted with slow growth of technical and vocational facilities has resulted in a peculiar educated unemployment problem. Accurate estimation of unemployment has become a tough task in view of ever increasing unemployment and under employment and failures of employment exchanges in recording correct figures. While unemployment in this State as a percentage of labour force has become double as compared to the country within 1985-2000 as per NSSO report, it is estimated to be 10.9% of total labour force with a total of 13 lakh (71%) registered educated job seekers, HSLC passed (51%) out-numbered HSSLC passed (30%) and graduates (16%) while technical and post graduate job seekers constitute a very minimal (3%) percentage. Placement of job seekers increased to 16% in between 2004 and 2005 constituting minimal (0.5%) increase in public sector and 9.3% increase in private sector with nearly 31% women employment in organised sector. Rural and women unemployment has become three times to all-India rate having acute unemployment among educated. Most of the self employed or partially employed youth bother a little to inform the employment exchange about their absorption which is also responsible for non-capturing of accurate employment situation. According to the NSSO report, the number of unemployed in this State is 18 and 24 per 1000 respectively in rural and urban area as against only 9 and 19 respectively in national level indicating a greater dimension of the problem in this State. According to the task force, the rate of unemployment in this State increased from 7.96 in 1993-94 to 8 per cent in 1999-2000 which is quite high compared to all India (nearly 7%), 2.93% of Himachal Pradesh and 3.06% of Rajasthan. Youths in this State are mostly interested in Government jobs in lieu of self employment or employment in private venture, which has enhanced the demand for jobs leading to major corruption in the recruitment policy. Ban on creation of posts and restriction on filling up vacancies has created mounting unemployment problem resulting in a grave political, economic and social disorder. Despite shooting up of GDP, employment growth in the State declined significantly within 15 years in agriculture. The call of the hour is to generate job opportunities through filling up vacancies considering intellectual achievement. It is necessary to locate certain sectors where unemployed youths can be accommodated suitably leaving aside Govt assignment. According to a study, the employment elasticity of various sectors varied significantly with primary sector of elasticity 0.74, manufacturing sector 0.19, trade and commerce 0.37 with overall average of 0.45. ILO having its goal of promoting opportunities for both the sex and ensuring security, freedom and dignity depicted persistent unemployment and dismal scenario of the world's employment situation in its
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PC budgets for early elections
Rs 60k-crore farm loan waiver, I-T exemption limit raised. P Chidambaram unveiled a Budget cleverly designed to win him many popularity contests. There were concessions on the income tax, reductions in customs and excise duties, and the mother of all farm loan waivers. While playing to multiple galleries, the finance minister also managed to reduce the fiscal deficit to lower than the target set under the fiscal responsibility law, and showed progress on the revenue deficit. Along the way, he designed his announcements so as to attack the twin problems confronting the economy: inflation (the excise and customs cuts will help lower prices) and falling consumer demand (lower tax rates for small cars and two-wheelers, and more money in people's pockets from the income tax concessions). Keeping in mind the Congressman's favoured
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Farm distress gets Rs 60,000 cr breather
DEBT WAIVER The loan waiver will benefit about 30 million small and marginal farmers. In an apparent move to appease the huge rural vote bank, the government today announced the biggest-ever agricultural loan waiver package that will cost the exchequer a whopping Rs 60,000 crore. The move will benefit about 30 million small and marginal farmers, whose debts worth Rs 50,000 crore will be completely waived, and about 10 million other farmers. Under this package, while all the outstanding unpaid loans of small and marginal farmers will be totally waived, the other farmers will have to repay only 75 per cent of the borrowed amount under one-time settlement arrangement. Announcing the largesse in his budget speech, Finance Minister P Chidambaram said the agricultural loans, which were restructured or rescheduled in 2004 and 2006, would also be eligible for loan waiver and concessional repayment through one-time settlement arrangement. All agricultural loans disbursed by the scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007, and overdue as on December 31, 2007, but not repaid till today, would be covered under this debt waiver-cum-relief scheme. The tillers of up to one hectare of land would be considered marginal farmers and those having one to two hectares of land would be deemed small farmers. The finance minister announced that the implementation of the scheme would be completed by June 30, 2008. The farmers would become entitled for fresh agricultural loans from the banks after the debt waiver or signing an agreement for repayment of 75 per cent amount under the one-time settlement arrangement. He, however, did not elaborate on how the banks would be compensated for the waived loans. Referring to the indebtedness of the farmers, Chidambaram pointed out that the government had appointed a committee under the chairmanship of R Radhakarishna to examine all aspect of this issue. "The committee had made a number of recommendations but stopped short of recommending waiver of agricultural loans.' The finance minister, however, sought to justify this populist move, maintaining that the government was conscious of the dimensions of the problem and was sensitive to the difficulties of the farming community. He also asserted that the government had carefully weighed the pros and cons of debt waiver and had also taken into account the resource position while taking this decision. Chidambaram told Parliament that notwithstanding some shortcomings, the growth of agricultural credit had been impressive. "We will exceed the target set for 2007-08. For 2008-09, I propose to set a target of Rs 2,80,000 crore.' he said. He thanked the commercial banks and regional rural banks which, together, accounted for between 75 and 79 per cent of agricultural credit disbursed during the year. Chidambaram said short-term crop loans would continue to be disbursed at an annual interest rate of 7 per cent, adding that an initial provision of Rs 1,600 crore had been made for interest subvention in 2008-09.
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Irrigation outlay raised 81%
IRRIGATION Outlay increased to Rs 20,000 crore. In order to provide more stimulus to the agriculture sector, the government has increased the outlay for irrigation projects by over 81 per cent. The outlay has been increased to Rs 20,000 crore for 2008-09, from Rs 11,000 crore for 2007-08. The Centre's contribution to the outlay is Rs 5,550 crore, up 44 per cent over the previous year's Rs 3,850 crore. The Centre's contribution will be disbursed to states in the form of grants. The government is investing heavily in the Accelerated Irrigation Benefit Programme (AIBP) and the Rainfed Area Development Programme (RADP), along with other water resources programmes. Under the AIBP, 24 major and medium irrigation projects and 753 minor schemes will be completed in this financial year, creating additional irrigation potential of 500,000 hectares. The RADP, with an allocation of Rs 348 crore, has been finalised for implementation in 2008-09. Under this, priority will be given to the areas that have not benefited from watershed development schemes. The centrally-sponsored scheme on micro irrigation launched in January 2006 has covered an area of 548,000 hectares under drip and sprinkler irrigation so far. With an aim to cover another 400,000 hectares, an allocation of Rs 500 crore has been made for 2008-09. Under the project, the states
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Politics over economics
This Budget asks and answers some rather big questions. Begin by asking the man in the street, and he will say that he is happy with Mr Chidambaram's Budget. And so the finance minister has dared politicians to criticize the farm loan waiver, and he might as well dare others to criticize the income tax cuts, if they care to. In other words, he knows that he has touched a popular nerve in both city and country. The second big question to ask, therefore, is whether economics can hope to prevail over populism, or whether political considerations always trump good economics. Certainly the UPA government's fifth and final budget gives unequivocal answers: it is a political budget from start to finish. And so a government led by economists and economic reformers has ended up bowing to political considerations and implementing over five years programmes that they may not believe in, but which they have to introduce and then find reasons to support. When a government led by such notables writes off Rs 60,000 crore of bank money, or 3 per cent of all bank loans, it is as well to remember the harsh words hurled at Devi Lal when he did the same; but since he was an unlettered kulak, he could be safely abused. The truth is that while farmers have been in distress, writing off loans makes every farmer who repaid his loan feel like a fool. What does that do to credit discipline? Also, the write-off does not end rural indebtedness because farmers owe more money to moneylenders. And if they got into financial trouble because farming does not pay enough, then the debt write-off is only a palliative and does not solve the underlying problem. So farmers who borrow again (if the banks are willing to lend) will also get into trouble again. But these are the questions that economists ask. There is also a question that lawyers might ask: how does the government tell the client of a private bank not to repay a loan, unless the government makes it up to the bank? And surely, the government is not about to start paying up to ICICI and HDFC and all the others, is it? The triumph of politics shows also in the national rural employment guarantee programme, which has been extended to all 596 rural districts, even though Rahul Gandhi who first demanded this realises now that the programme is not being implemented well. Another indicator of the soft state is the increase in the income tax floor from Rs 1.1 lakh to Rs 1.5 lakh (it is still higher for women and senior citizens). But even in the United States of America, people start paying tax at a lower income level of $3,400 (Rs 1.36 lakh), while in China the tax floor is $1,400 (Rs 56,000). India is poorer than both those countries, so why do people with higher income in a poorer country get away without paying income tax? The answer is that the government wants the urban, middle-class vote. The fifth indicator of politics trumping economics is the government's refusal to raise petrol, diesel and cooking gas prices to reflect their real cost. So the oil marketing companies have lost over Rs 70,000 crore on this account in the past one year. The way the government does its accounting, some of these figures do not show up in the Budget, even though the government will finally have to pick up the bill. If you add up the oil subsidy, the fertilizer subsidy, the extent of the loan write-offs that have to be made good and the money that has to be provided for the Pay Commission award, the total is huge. That brings up another big question: should the Fiscal Responsibility and Budget Management (FRBM) Act be scrapped? For this law seems to be having the perverse effect of making the government hide more and more of its expenditure and not show it in the Budget. The finance minister can then claim that he is meeting FRBM targets, when in truth he is not. Scrapping the law might encourage more honest budgeting. The last big question is whether governments can be trusted to be responsible with money. Note that taxpayers have paid up an average of 22 per cent more tax each year through the five Budgets of the UPA government