Modi Govt’s Demonetisation & GST Moves Destroyed India’s Rural Economy: Krishna Prasad

Written by Deborah Grey | Published on: November 3, 2017
India’s agricultural crisis has taken a toll on farmers and peasants across the country. First, some of the country’s most productive farming belts suffered under successive droughts in 2015 and 2016. Then, just as things began to look up on the weather front, the Modi government dropped two consecutive bombs of demonetization and GST, which according to experts, completely destroyed the rural economy.

Farmers Distress
Image: Indian Express

In an exclusive interview to Sabrangindia, P Krishnaprasad, Finance Secretary of All India KisanSabha, tells us how India’s farming community continues to suffer even today.
“The BJP came to power on the back of campaign slogans about the economic inadequacies of common people. But their subsequent policies have failed to reflect that commitment,” says P Krishnaprasad. He speaks of the series of protests and agitation by farmers in Maharashtra, Madhya Pradesh and Rajasthan and says that this is a reflection of their growing discontent with the present government. “Even simple things like implementation of the recommendations of the Swaminathan Commission Report like paying farmers 50% above the minimum support price have not be done yet,” he says explaining why big and small farmers across India are frustrated. “Take the case of Mansaur where farmers who used to sell white onions for Rs 120 a kg are now forced to sell it for throwaway prices like Rs 10 to Rs 15 per kg! Why wouldn’t they be upset,” he asks.

He is also critical of the failed demonetisation experiment which according to him broke the backbone of the rural economy by wiping away currency.

“Without cash agricultural trade came to a standstill, forcing them to sell at a loss ranging from at least 20 to as much as 60 percent. This trend of distress sale continued for as long as four to five months after demonetisation,” says Krishnaprasad. He is also critical of the forced digitization of money which he says is not viable in rural India. “First, many of the Jan Dhan accounts were just on paper. Then, the banks were in towns that were 15 to 20 kilometers away from the villages, making it difficult for farmers to operate on a day to day basis,” he says, adding “Ground realities in rural India are very different from Delhi and Mumbai. We don’t have an ATM at every street corner!”

Krishnaprasad also feels GST played a huge role in pushing the agricultural economy further down a spiral. “All agricultural produce needs to be transported from the fields to the markets, from rural to semi-urban and urban areas. GST adversely affected the transportation industry and therefore impacted the agricultural sector too,” he explains. “What’s worse is that the Modi government has failed to bring down fuel prices, thus worsening the economics of transporting agricultural produce,” he says.

Krishnaprasad is also critical of other government policies related to agriculture such as the new land acquisition law which he feels completely ignores the best interest of farmers. He also finds FDI in agriculture problematic as he feels it can be misused to perpetuate the monopoly and dominance of corporations over farmers. “Even initiatives like digital platforms to help traders find agricultural produce at cheap rates were originally meant to streamline the process by eliminating middlemen, ended up hurting the petty traders while large traders made huge profits. For example, they would purchase dal at Rs 20 a kg and sell it for Rs 180 per kg,” he says.

“The disillusionment is showing. There has been a 42 per cent increase in farmer suicides,” he claims. “Farmers are pushed further and further into debt, the insurance schemes are not managed properly either. Out of a premium of Rs 21,500 crores, only Rs 6,300 crores has been disbursed,” he claims. “Then there is the ridiculous ban on cattle trade. Farmers love their cattle and it’s not like all cattle owners and traders are from the minority community,” he says. “Farmers only sell cattle in emergencies and when they have no other alternative. On one hand you cripple cash supply, on the other you prevent them from getting money by selling cattle,” he laments.

Krishnaprasad says farmers today have three basic demands. “We want remunerative price for all crops. We want the implementation of the recommendations of the Swaminathan Commission. Finally, we want freedom from indebtedness,” he signs off.