It has been almost three decades since India liberalised and integrated with the global economy. It was the seventh largest economy in the world by gross domestic product (GDP) in 2018. But this growth has slowed, and is expected to shrink further in 2019-20, according to multiple global institutions. 

“The data that I have seen reinforces very strong concerns [about the economy],” Stiglitz told IndiaSpend in the course of an interview. “I do not know anybody who is not in the government who is not worried.” Governments tend to “suppress data when it is on shaky grounds”, he added.
While India has been able to benefit from globalisation, there is a view that is “not an uncommon view but an unpleasant one”, that in a regulated market like India foreign players “have a disadvantage because the insiders know how to play the game”.

Stiglitz won the 2001 Nobel Prize in economics for his analyses of markets with asymmetric information. He was a member of the Council of Economic Advisers in the US from 1993-95, during the Bill Clinton administration, and its chairperson from 1995-97. Between 1997 and 2000, he served as chief economist and senior vice-president of the World Bank.

Stiglitz has authored multiple books on economics including People, Power, and Profits: Progressive Capitalism for an Age of Discontent; Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump; and The Price of Inequality: How Today’s Divided Society Endangers Our Future. In 2011, he was among Time magazine’s 100 most influential people in the world. He is a professor in the department of economics at Columbia University and founder and president of the Initiative for Policy Dialogue, a think-tank on international development based at the university.

In this interview, Stiglitz explains the impact of globalisation in the last two decades, and of populism, the rise of the gig economy, and the problem of inequality in India and the world. Edited excerpts:

How has globalisation changed in the last couple of decades, particularly with the rise of protectionism and populism and what impact have you seen on emerging economies like India?
Twenty years ago the common wisdom was that trade would benefit all. It was a contested view in both the [global] North and South. While it was held by a lot of elites, it was not universally held. Many developing countries only liberalised with the threat of the International Monetary Fund as a condition of getting aid in the structural adjustment programme.

I wrote papers in the early 1980s pointing out that [global markets] are not perfect risk markets and trade can make everybody worse off. Trade exposes countries to risk without risk insurance, producers of risky products may contract production that might hurt people in other parts of the economy, and similarly, many people in all countries could be worse off.

It was meant to be a warning against naive globalisation. Although it [paper] did not ask people to not go ahead with globalisation, but it says that those people who think that everyone will be better off have not proved the case. Under certain assumptions, it would make some better off while others would be worse off. The gainers could compensate the losers, but they never did. The other problem is the assumption that markets are perfect, which was not true.

When I wrote this nobody in the policy world paid any attention to it, even when I was in the White House and the World Bank. Eventually (by the time I wrote Globalisation and Its Discontents), there were examples of jobs being destroyed and not as many being created. It showed that we had to learn to manage globalisation better. It was not that globalisation was necessarily bad, but it was not good either.

India has gained a lot with its integration into the global economy (US and western Europe), including the technology sector, modernisation, [new] universities, etc. Though it is not so clear that better managed policies with respect to importing cheap Chinese manufactured goods would have led to a robust manufacturing sector [in India]. 

Young people seem to have found opportunities in the gig economy through cab aggregators like Uber and Ola, and other food delivery applications in India, often working long hours with inadequate benefits. In California, new legislation has made it harder for gig economy companies to treat their workers as contractors instead of employees. Similarly in India, there have been protests demanding labour benefits for workers in the gig economy. How do you assess the gig economy globally and its effect on economies like India?
At one level you can celebrate that they make it easier for people to enter the labour force, but clearly part of their business model is exploitation and circumvention of existing regulation, most of which have a good purpose.

In New York [city] there was a study on the wages paid to the taxi cab drivers on [such] platforms which said that they received $6 per hour which was below the minimum wage and a livable wage. This is also a dangerous wage because of the increased number of hours that a person would have to drive. New York city has passed a law that tripled the wage to about $18.

Knowing where your cab is and being able to call them has efficiency gains, but this could have been done even if it was regulated by taxi cabs. I think there are efficiencies that the gig economy can bring, but the business model is driven by exploitation and circumvention. We have to maintain the advantages the model offers but at the same time restore more bargaining power and regulate the bad aspects.

While you have maintained that “GDP is not a good measure of wellbeing”, India’s GDP growth has been revised downwards by multiple agencies. Further, there are issues of data suppression. Abhijit Banerjee, one of the 2019 Nobel Prize winners, believes that the “Indian economy is on shaky ground”. Would you agree?
One of the problems when there seems to be data suppression is that you cannot precisely know what the state of the economy is. But usually governments suppress data when they are on shaky grounds. They will suppress data when there is weak growth.
There are a number of indicators like consumption which are, to say the least, worrisome. It is hard to have a robust economy when the basic data for consumption and investment are weak, as they are [in India]. So, the data that I have seen reinforces very strong concerns [about the economy]. I do not know anybody who is not in the government who is not worried.

The pre-tax national income of the top 10% in India increased by nearly 23 percentage points to 56.1%, while that of the bottom 50% declined nearly 8 percentage points to 14.7% over 25 years to 2015, according to the World Inequality Database. The nine richest Indians now own wealth equivalent to the bottom 50% of the country. Why is there an increasing accumulation of wealth globally, and what are the solutions?
There are many dimensions to this problem. The people at the top figure out ways of not paying taxes, so their wealth multiplies in a way ordinary people’s cannot. The largest Foreign Direct Investment source for India for a long time has been Mauritius, which is a tax haven. A lot of the wealth [in India] has to do with special deals in telecom or defence, where the government gives a license or contract. It becomes difficult to know if the price is competitive.

In the US, real estate developers get zoning variances that allow them to do things others do not (through political connections). Two of the richest contributors to the Republican party were people who run gambling establishments globally. Gambling is a part of the money laundering industry.

Even in China, a lot of billionaires are part of the real estate industry with connections to local party officials and have access to land. In a natural resource economy, getting favourable access to it brings wealth. But there are also people like Jack Ma of Alibaba who have been really entrepreneurial.

In India, wealth was created in telecom and there is a very strong view that players did not do so in a regular and competitive way. I knew some of the [multinational] companies that wanted to play by the rules, and they said that it was just not possible. They had the technology and expertise but they said that India was a “dirty place”.

Was it the corruption and bureaucratic red tape? Are there solutions?
They could manage the red tape. It was a combination of corruption and thuggishness, although I never got a clear view of the nexus between outright thuggishness and corruption. But they left. These were honest and brilliant people [US companies], who would have brought talent.
It was not an uncommon view but an unpleasant one, which was that in a highly regulated country with big players, outsiders have a disadvantage because the insiders know how to play the game.

The solutions are that with the right government you establish rules of transparency, oversight, independent procurement agencies, independent corruption agencies. Singapore and Hong Kong have managed it to a good extent.

How does the rise of populism and majoritarian governments worldwide perpetuate the problem of inequality? And what changes do you observe in democratic institutions in India and the US, particularly in the role of civil society?
When people see unfair outcomes they get disillusioned with the system. Things can go a couple of ways. You could get a demagogue like [Donald] Trump who knows how to exploit the discontent but not cure the problem, [which can] make things worse. Then you have the other side where you have reform movements (which is hopefully happening in the Democratic party) where policies are being put in place for more competition, stringent ethics, oversight, among others.

The central governments of India and the US have taken measures to detain illegal migrants. Amit Shah, India’s home minister, has talked about a nation-wide expansion of the National Register of Citizens while the US is planning to take DNA samples from asylum seekers and other migrants. What is the fallout of such measures?
When things are not going well, people always want to blame somebody else. This may be foreign trade [for example]. But we made that trade [deal]. India may make the excuse that the US forced it to sign, but the US cannot make that excuse because we were the ones who wrote the deal.

Immigation is not the source of the problem in the US. The parts of the country with a lot of immigration love their immigrants. We could not function without our immigrants. It is a problem in the country where immigrants do not want to go, and where there is emigration and not immigration. The issue is that [in these parts] societies are collapsing as there is no economic opportunity, reduced life expectancy, and issues of drug overdose, alcoholism and [high rates of] suicide. This is the problem, not immigation.

(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend

The post ‘There Are Very Strong Concerns About The Indian Economy’ appeared first on SabrangIndia.

• India has failed to increase the scale of the microenterprise sector substantially;
• A majority of India’s microenterprises are tiny and run with fewer than three workers;
• The sector shows good growth in labour productivity but with very low wage levels.

These are some of the significant conclusions of the study by Azim Premji University’s Centre for Sustainable Employment and the Global Alliance for Mass Entrepreneurship, which looked at all non-farm microenterprises, except the construction sector (National Sample Survey covered manufacturing and services sectors).

Microenterprises create 11% of jobs in India, as per the report, which is based on the Sixth Economic Census and National Sample Survey data (67th and 73rd rounds). This is significantly less than the 30%-40% in other developed and developing nations. This can be changed if state and central governments help microenterprises scale up their operations and become more gender-inclusive, the study has said.

There is also a problem with women’s participation in India’s microenterprises: Social and market factors are loaded against them affecting their productivity, as we explain later. Women run 20% of all microenterprises, make for 16% of their workforce, and contribute 9% of aggregate value-added in the sector, as per the 2015 figures cited in the study. But in six years to 2015, their share in the ownership of micro units and value added did not increase and their share fell two percentage points.

Between 2010 and 2015, microenterprises in the apparel and education sector registered the highest growth (5% or more CAGR) in rural India. In urban areas, education, health and sale of cars and motorcycles reported the most growth. At this growth rate, microenterprises in the field of health and education together create around 260,000 jobs every year in India, the study noted.

The study analysed geographical distribution, demographics, gender (employment and enterprise ownership), industrial distribution, labour productivity and wages.

Most microenterprises have three or fewer workers
Over six years to 2015, employment in non-farm microenterprises grew from 108 million to 111.3 million with a compounded annual growth rate (CAGR) of 0.6%. Their aggregate gross value grew at 9% CAGR, from Rs 7.4 lakh crore ($104 billion) to Rs 11.5 lakh crore ($162 billion).

But Indian microenterprises have “low output elasticity of employment that is seen in the organised sector”, said the study. This implies that despite effective growth in value addition in the sector, job opportunities grew little.

State-Wise Share Of Microenterprises Based On Number Of Workers

Source: Microenterprises in India: A Multidimensional Analysis (October 2019)

Nationally, 55% of the enterprises surveyed operated with only one working owner and no paid or unpaid workers while another 32% operated with two to three total workers (paid and unpaid), the report noted.

There are state-wise variations in the scale of operation of microenterprises: In West Bengal

and Assam, nearly 90% fell within the two smallest size classes (upto 2-3 workers). In Delhi and Gujarat, most tend to employ upto 4-5 workers. 

“Very tiny microenterprises with one or two workers are more likely to be ‘reluctant entrepreneurs [those content to do small business]’,” said Amit Basole, co-author of the study and faculty at the Azim Premji University. “So they may not be able to grow much. But enterprises that employ around 4-5 to say, upto 20 workers are the promising part of the microenterprise sector. They are likely to grow if given the right support and can create millions of jobs.”

Between 2010 and 2015, retail units in the microenterprises sector had the largest share of firms and workers (30%) in rural and urban India. The other large employers in rural India were micro units engaged in transport, apparel, tobacco, and food products. In urban areas, restaurants, apparel, education, and wholesale trade employed the most workers, the report noted.

Education sector paid the best wages, tobacco least
In 2015, among microenterprises that were large employers, the lowest wages and productivity were reported by the rural tobacco industry. The average monthly wage here worked out to less than Rs 5,000 per worker per month, as per the study. The highest productivity was in the  education sector in rural areas–nearly Rs 13,000 per month per worker–as was the highest wage level (Rs 10,000).

But urban areas fared poorly. None of the large employers in cities and towns showed average monthly wages of Rs 10,000 or above. Most paid Rs 6,000-Rs 8,000, said the study.

Wage Rates In Various Industries in 2015

Source: Microenterprises in India: A Multidimensional Analysis (October 2019)

“In part, the reason is that the level of productivity is still low despite growth–wages generally cannot exceed productivity,” said Basole. “The other reason is that even if productivity grows, this does not necessarily translate into equivalent wage growth because there is a lot of surplus labour in the informal economy. This prevents wages from rising.”

Smallest units performed best
In terms of their contribution to India’s economy, it is the smallest scale of microenterprises that increased their share in gross value added and employment. That the larger ones failed to do so is “worrying”, the study said.

Up to 60% of all unorganised sector enterprises in 2010 were single-worker enterprises and their share increased 2 percentage points to 62% by 2015. Single-worker firms and firms with up to three workers accounted for 93% of all firms in 2010 and 94% in 2015.

The sector faces several challenges when it comes to scaling up operations. These include low levels of productivity and wages, lack of access to credit, infrastructure and markets, and punitive regulation, according to Basole.

Firms with 4-5 workers are 50% more productive per worker than their smaller counterparts while the wage rate does not vary much across size classes, the study noted. The increase is seen mostly when units go from 2-3 workers to 4-5; beyond this, “surplus increases more slowly and even declines for the largest size class”, the study said. Larger firms are not proportionately more productive perhaps due to infrastructural constraints in the unorganised sector, the study noted.

Government policies aimed at the growth of this sector will work only if they are sustained and realised in coordination with other policies, said Basole. Schemes like MUDRA, which provides loans up to Rs 10 lakh to non-corporate, non-farm small/microenterprises, have “focused too much on very small loans, which tend to not give sustainable growth in the enterprise”, Basole said. So the focus needs to be on scaling up microenterprises to the point where a typical enterprise employs 4-5 workers, not 2-3, he added.

Why women are at a disadvantage
Women’s engagement with the microenterprises sector has not been satisfactory, as we mentioned earlier. The scale of operation is smaller for women than men, the study found. Upto 216,000 of women-owned microenterprises of 8 million (or 2.7%) hired three or more workers, 45,000 hired 6-9 workers and 25,000 more than 10. But for men, the comparable numbers were larger: 3 million hired three or more workers, 500,000 hired 6-9 and 233,000 more than 10, the study noted.

Further, in 2013-14, more than three-quarters of total workers employed (13.4 million) by women-owned establishments were female. This showed a “high tendency for women to work with other women”. Manipur (91%) and Kerala (90%) had the most in terms of women-owned enterprises that employ women.
 

Source: Microenterprises in India: A Multidimensional Analysis (October 2019)

In urban India, the gross value added per firm for female entrepreneurs was 46% of male-owned firms, labour productivity was 62% and assets-owned 40%. In rural areas these figures stood at 35%, 44% and 43% respectively. Both in urban and rural India, 10 industries accounted for over 90% female-owned firms.
“Women tend to operate smaller enterprises, tend to be home-based (which means they cannot expand easily) and tend to work with other women,” said Basole. “They often do not own assets (such as titles to land or home) that can be collateralised for credit.”

Women also have to juggle work with domestic responsibilities, making it harder for them to invest enough time in the enterprise. They also face discrimination in the market–getting a lower price than male entrepreneurs for the same product, said Basole. 

(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend
 

The post India’s Microenterprises Can Spur Jobs, Gender Equity If They Scale Up: Study appeared first on SabrangIndia.

Constant changes in definition and revision of the GDP estimation methodology create suspicion on the quality of data, says Abhijit Banerjee, development economist and professor of economics at the Massachusetts Institute of Technology. India must establish a process which is without interference and increases credibility, he says.

The scheme promises to provide Rs 72,000 annually or “a flat, uniform amount of Rs 6,000 a month to the poorest 50 million Indian families”, and “entails a peak cost of Rs 3.6 lakh crore–1.8% of India’s gross domestic product (GDP) today,” wrote Praveen Chakravarty, chairperson of the Congress party’s data analytics department, in The Economic Times.

Abhijit Banerjee, Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology, was one of the economists consulted for formulating NYAY. “Financial viability is an issue,” he told IndiaSpend in an interview, and suggested that many current schemes would have to be reviewed and shut down.

Banerjee, 58, co-founded the Abdul Latif Jameel Poverty Action Lab or J-PAL, a research organisation, and is one of its directors. He has been a fellow of the American Academy of Arts and Sciences and the Econometric Society, and has been a Guggenheim Fellow and an Alfred P. Sloan Fellow. He received the 2009 Infosys Prize for social sciences and economics, and was named one of Foreign Policy magazine’s top 100 global thinkers in 2011. He co-authored Poor Economics with Esther Duflo, which won the Goldman Sachs Business Book of the Year award. He served on the UN Secretary-General’s high-level panel of eminent persons on the Post-2015 Development Agenda.

In an interview with IndiaSpend, Banerjee spoke about the the financial viability of NYAY, the need for India to formulate a wealth tax, and the quality of government data and interference in its estimation.

In January 2019, GDP for 2016-17, the year that saw demonetisation (in November 2016), was revised upwards to 8.2%. What is your assessment of the economy under the present government, and how does it compare to the previous one?

These numbers have lost so much credibility. I have no way of checking them and am not going to get into a debate about reading the tea leaves. This is the tragedy of constantly revising data.

There are changes in definition and revisions, but it somehow always seems that the growth in a particular year went up. This process needs to stop. No number is perfect, but constantly tweaking the process where there is a potential for political interference does damage. It creates suspicion about the quality of data.

You were one of the 108 signatories to a letter that red-flagged data suppression and interference in data estimation by the current government. Have you witnessed government interference of this nature before, and what must be done to resolve the matter?

There must be a committee of experts that has credibility to propose a stable methodology that can then be back-cast, say for a decade, to reconstruct consistent GDP series for those years.

Even in China there are are similar claims about data manipulation, especially at the provincial level, and there are many people there who are suspicious of the data. I believe that some Chinese government officials have even suggested that they look at non-government numbers. They seem be more open to this than we are.

In India, there have long been discussions on why the GDP data is collected in a particular way or why the government does not invest more in the National Sample Survey. It may be more true now that people are questioning political motives than before, but the idea that the data collection agencies have failed is not new. Earlier, the release of [revised] data was not so frequent and if there was clear opposition to the government’s numbers, the government had a set of experts who were established as being objective. So, it was a bit more process-driven.

Currently, the NITI Aayog comes up with one number after the other whenever it wants. When I speak to people in the financial world, they say that they don’t pay any attention to government data anymore. We must invest money and effort to bring in experts from India and abroad and establish a process which is without interference and stick to it without any fiddling for, say, the next decade.  

Recently, with reference to unemployment, you wrote “something will need to be done, and it will probably eventually take the shape of a minimum income guarantee”. The Congress has proposed NYAY and the Bharatiya Janata Party government has started implementing PM-KISAN (announced in budget 2019) to offer income support to small and marginal farmers. There have been questions about the financial viability of both, particularly NYAY. Your comments?

Financial viability is an issue. There is a long-term problem we face. I think we are not taxing the economy enough. If NYAY is implemented it will add urgency, but even without it we need a series of fiscal intervention. I have been saying this long before NYAY was discussed. I think we are under-taxed.

We need to bring down our interest rates and give some semblance of balance to our budgets. This will involve figuring out the subsidies that need to be cut and taxes to be increased, or risk going back to high inflation. We cannot afford the interest rates we have, our share of government debt in GDP has been going up since 2014, and creditworthiness will eventually be hurt. We do not want to get into such problems. So whether or not we have NYAY we will have to solve the problem [of not imposing enough tax].

Praveen Chakravarty, chairperson of the Congress party’s data analytics department, mentioned in an interview that around 939 schemes excluding 11 core schemes will have to be reviewed for financial rationalisation if NYAY were implemented. Manmohan Singh, former prime minister and economist, said that no new taxes on the middle class would be required to fund NYAY, and that 1.2% to 1.5% of GDP, at the scheme’s peak, would be needed. Do you agree?

I do not think there is going to be enough money from just cutting the minor schemes. But I do agree that schemes should be reviewed and many should be shut down. There is money there which can be utilised. Both taxes and expenditure rationalisation are important. I am all for more taxes on the rich, maybe we can look at some version of a wealth tax. There needs to be some thought on how much the wealthy population can be taxed.

Have you made an assessment of the schemes that can be shut down to facilitate NYAY?

The right way to think about NYAY is that it is the opening step in creating an infrastructure for making money transfers possible rather than an entitlement for a particular good. It is better to give people cash than a fertiliser subsidy or free power.

However the first step has to be to convince people that the subsidy delivery mechanism works. This is what NYAY can do. So the major subsidy schemes cannot be removed before NYAY is well established and in the short-run, there will definitely be some fiscal pressure.

You were consulted by the Congress for NYAY. What sort of inputs did you provide? How will a government go about targeting the poorest given that poverty data has not been collected since 2011-12?

I think the hardest group to target would be those who are a bit further up beyond the bottom 20%. The poorest 20% are relatively easy to identify and if they [the government] are willing to be inclusive, even if it includes up to 22-25%, the targeting should be not too bad.

In our research, we find that there is relative agreement on who the poorest are even within villages. So it should be possible to combine an updated version of the socio-economic and caste census and some local community review mechanisms to come up with a targeting procedure. It may not be perfect, but the scheme has to be run in a way to ensure that the associated infrastructure works and people do not get excluded for random reasons.

I was consulted on matters relating to estimating beneficiaries for the scheme considering that exact numbers or data are not available.

Economic inequality is high in India. The nine richest Indians now own wealth equivalent to the bottom 50%. Nearly 50% of the population is dependent on agriculture that contributes 14% of the GDP. Rural distress is a major issue. What are the solutions? Is moving people out of agriculture the only viable alternative?

We do not have the urban infrastructure to move everybody out of agriculture. It may be true that around 50% are dependent on agriculture, but the share of their incomes from agriculture is actually less than 50%. Many people in agriculture have other jobs to supplement their incomes, which often involve temporary migration to cities.

One of the things governments can do is to create low-cost spaces for migrants to live in so that it is more viable to work in urban areas. But this is unlikely to be a very big part of the story in the short run. My prediction is that we will move towards cash transfer as many of these lives are only marginally viable, especially among the younger, more educated generation that does not want to do the same jobs or have the same lifestyles as their parents did. We have this political problem that needs to be solved.

In a March 2019 paper, you (along with Thomas Piketty and Amory Gethin) noted that “voters seem to be less driven by straightforward economic interests than by sectarian interests and cultural priorities”. Worldwide, we have seen a rise in populist leaders. Is this trend a major worry for India given that the rise of religious divisions and the persistence of strong caste-based cleavages is “determining voters’ choices” while “education, income and occupation play little role (controlling for caste)”?

There should be more politics based on economic interests because those are aspects that we can deliver on without creating social divisions. If voters come to believe that the state cannot offer anything useful in terms of economic benefits, then they will be responsive to sectarian claims. If people start caring about only sectarian issues, then parties have an incentive to promote it and then we will end up in a totally fractured polity.
The advantage of economic interests is that they can often be addressed, whereas sectarian interests cannot be addressed other than saying that we will hurt those others, which is frightening.

The criteria for 10% reservation for economically weaker sections announced by the BJP government allows a majority of households to qualify. How do you assess this reservation policy and what are the political and economic implications that you foresee?

This policy won’t do anything. People from upper castes with an annual income less than Rs 8 lakh are a huge part of the population and they are already getting more than 10% of the jobs. Other than as a political gesture, it will have no consequences.

Almost four-fifth (Rs 5.5 lakh crore, or $79.51 billion) of the total amount of corporate bad loans written off in the last 10 years was during the five years after April 2014, noted an April 2019 report in The Indian Express. Nearly Rs 1.5 lakh crore was during the nine months ending December 2018. Farm loan waivers have received much criticism as a populist measure while such corporate write-offs do not seem to. How do you explain the problem of non-performing assets and write-offs and its implications on the economy?

The public sees it asymmetrically because one happens quietly while the other does not. The media must put the spotlight on such write-offs for corporates. Of course there may not be much of an option now given that the banking system has frozen up under the burden of debt and is unable to deliver.

The issue is more that the wrongdoers get away with it. Corporate interests are protected by layers of law which are in their favour. The poor farmer mortgages land and loses it when unable to repay loans. Farmers are vulnerable, whereas it is hard to hold corporations accountable. A corporation can go bankrupt without the controlling individuals being affected unless there is a private guarantee involved.

Disclosure: Praveen Chakravarty was a founding trustee at IndiaSpend before he joined the Congress party as chairperson of its data analytics department.

(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend

The post ‘Many Schemes Must End, Be Reviewed To Fund NYAY’ appeared first on SabrangIndia.

Actor-turned-politician Prakash Raj is contesting as an independent candidate in the 2019 parliamentary elections from Bangalore Central. He believes that an independent politician can wield influence and make significant changes.

On December 30, 2018, Raj announced his decision to contest the 2019 parliamentary elections as an independent candidate. His constituency is Bangalore Central, held by the Bharatiya Janata Party (BJP) since 2009, which will vote on April 18, 2019. Raj wants to introduce an alternative model of development that benefits marginalised communities, he told IndiaSpend in an interview.

Raj believes that once regional parties emerge, the structure of policies and governance, as defined by national parties, will change. The Bharatiya Janata Party’s campaign, revolving increasingly around issues of India’s security in the wake of the Pulwama terror attacks and India’s retaliation, has left voters in his constituency unmoved, he said.

You did not wish to join politics but would campaign against the BJP, you had said in March 2018. A year later, you are in the fray as an independent candidate. Why did you change your mind?

I never intended to, or thought I would, join politics. My decision to stand as an independent candidate today is the outcome of an organic process. I was very disturbed by the politics of hate that was rampant and growing in the country. I was further unsettled when my dear friend Gauri Lankesh was assassinated by men connected to a right-wing organisation which shares the same ideology as the government in power. I wanted to do something about this state of affairs. I wanted to question those in power, those the assassins are connected to–what are they doing about it?

My questions were not just about Gauri’s murder. I also questioned the education system and the state of government schools, among other things. But I soon realised that just asking questions was not enough. I discussed this with some of my close friends and colleagues. These led to my decision to contest the elections. So here I am today, an independent candidate hoping to work for the people of the country.

As a first-timer in Lok Sabha elections, what is your political vision?

In my view it is not just the standard of living but also the standard of life that must be enhanced. You see women in slums standing in long queues with pots waiting to fill water for their families. You are pushing people to desperation and this is not the standard of life we need. The aspirations of children are also affected when parents can’t afford an education. Pollution is so bad, people have to cover their faces to protect themselves when they step out of their homes.

There are more jobs-seekers than jobs. Often these jobs seekers are over-qualified for the jobs [they seek]. In a city like Bangalore, you can understand [political] priorities when you see that there are only 6,500 buses to serve the majority of the population while there are nearly 300,000 private taxis.  

While the value of land seems to have gone up, the value and dignity of life has not. There was no vision before and now we are not in a position to complain. We need to understand the reasons and develop a vision to resolve many of the issues.

As an independent candidate, won’t your ability to influence policy be limited?

We should not get into this trap. The [existing] electoral process is like an advertisement, an event. The spirit of the Constitution did not have political parties. It is an individual who represents a constituency. The parliamentarians who represent various constituencies across the country must work together towards creating solutions and policies that must benefit the people, not their party. All elected representatives are strong enough and have a voice.

An independent can raise questions in parliament and its committees. An independent is not just an individual, but represents the constituency. If you think an independent cannot influence policy, well then, what have the parties with a majority done? In a party, especially in a majority party, we have seen parliamentarians without a conscience or a voice.

In 2014, 3,234 independents contested the general elections–an average of almost six per constituency. While independent participation has swelled, the candidates collectively managed to get less than 5% of the total votes per constituency. Does that worry you?

We need to look at the candidates. I am not an independent candidate who is not known. I have been voicing my opinion for a while. We need an alternative. One thing is clear that the national parties have failed. Neither of the two national parties can claim that they’ll form a government. They need support from other parties. Regional parties are also strong players and are coming together to survive.

I think regional parties have leaders who know it is their time now. They have realised that the only way to survive is to work together on issues. With the emergence of regional parties there will be a change in what is considered a national issue, which was not the case when national parties were in power. Agriculture, finance, education policies among others will be restructured when regional parties emerge.

So would you prefer to work with a regional party?

I would like to partner with or support a government or the opposition as long as I am working in the interest of the people I represent.

In the 15 years to 2015 in Karnataka, only three years–2005, 2007 and 2010–did not see a drought. Farm distress has grown since–2018 too was declared a drought year in Karnataka. How do you plan to influence policy-making on water, especially since Bengaluru is among the 21 Indian cities expected to run out of groundwater by 2020?

If we look from north to south Karnataka, we see the cultivation of crops like sugarcane which are water intensive. Often these [farms] are owned by politicians. Political parties have not foreseen the loss of lakes and water bodies. There are government properties that lie unused which can be used to create lung space for the city.

We need to think about storing rainwater and recharging groundwater. We seem to develop apartments but cannot figure out what needs to be done with the sewage water. This has to be the priority to improve the standard of life.

Although the number of farmer suicides in India declined 21% in 2016 compared to 2015, Karnataka recorded the second-highest number after Maharashtra. How do you assess existing government policies on farm distress and what are your plans?

We need to have a scientific approach. Farm loan waivers are not a solution. Is this sustainable year after year? We must discourage water-intensive crops and provide incentive to farmers to move away from cash crops, and develop cold-storages for produce. We also need to look at the issues relating to the fringes of our forests, ensure their survival and the people dependent on them. The [Madhav] Gadgil report was a good report, but there too we saw political interference. If there is no intent, nothing can happen.

Six of Karnataka’s 30 districts have 1,720 manual scavengers, and the numbers may rise to “over 10,000” if all the districts are counted. These numbers are higher than the Centre’s estimate. How would you highlight the problem if elected?

This is the case with manual scavengers, contract labourers and contract teachers. They are not given proper equipment because you do not understand their work, do not respect them and their concerns with job security, do not empower their children with education and health. There is no intent. The government is not providing charity but it has a responsibility to empower. It has to be sustainable and governance has to be inclusive.

You are getting support from activists and political parties such as Swaraj India, Aam Aadmi Party, Communist Party of India (Marxist), among others. What do you have in common with their agendas?

I respect them for their agenda. They are not egoistic. They want someone who is secular and makes sense. I am happy because people and organisations including auto-rickshaw unions are politically active and backing me as they think I will be their voice. When I began I knew there was disillusionment and a voice was needed.

Prime Minister Modi has often talked about India’s “high” GDP growth during his tenure. How do you assess this perceived link between right-wing politics and development?

In 2014, one of the first things that the BJP government did was to redefine the calculation of GDP. This made it seem like there was a sudden increase in the country’s GDP. During the Manmohan Singh government, if the Modi government criteria is applied, GDP increased by only 2%. Though NDA-II [National Democratic Alliance, led by the BJP, which came to power for the second time after the 2014 general elections] projected a higher rate of GDP growth, in actual fact, the country’s economy was not doing well.

Implementing demonetisation when he did, Modi further weakened the economy by increasing taxes. Unemployment rose. His bombastic rhetoric of ridding the country of black money had the nation cheering the process until the impact of demonetisation was felt and economically weaker sections of the cities started their exodus from cities.

Modi’s attitude towards jobs was one factor in the discrepancy between projected and actual unemployment. Making pakoras [fritters] is also a form of self-employment, he said in an interview. Unless there is a recognised process for (how we define) jobs, a government cannot claim this or that is self-employment. Most of the schemes he offered and tried to implement were merely to appease the people. They were not thought through and had no vision. This became apparent with Swachh Bharat when he talked about the dignity of women. Just making toilets across the country is not enough if you don’t take into consideration the people using them, their requirements, the mechanisms in use, sustainability issues, what it will take to run them and so on–70% of the toilets built have become godowns now.

When we assess and analyse what he has done, [we find] most of the work is half-hearted and not properly implemented. We need to understand this is just rhetoric. As conscious citizens, we need to analyse what the intentions behind these schemes and promises are. Do they really have the kind of compassion or love [Mahatma] Gandhi did? Do they have the thought process to create a constitution where the mobs doesn’t take over, real democracy and equality among citizens can be ensured? That is what we need.

All through history we see that the ideology and rhetoric of every right-wing government was built on lies to fool the public. They created false paradigms of development and sold it to the people, with no intention of it ever serving the public. That is what is happening today as well.

A recent survey revealed that the popularity of the BJP has revived in the wake of recent events and developments: the Balkot airstrikes, the Centre’s Rs 6,000 fund transfer to small and marginal farmers, and the 10% reservation for economically weaker sections. Your comments?

In my constituency, I did not hear the word ‘Balakot’, or anything about the 10% reservation. Hindutva was not an issue with those I have spoken to. Their issues included water, jobs development, and self respect.
(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend

The post ‘Not One Voter In My Constituency Has Spoken About Balakot or Hindutva’ appeared first on SabrangIndia.

Infrastructure and education methods have been revamped since the Aam Aadmi Party won 67 of 70 legislative assembly seats in India’s capital in 2015 (it did not win any parliamentary seat it contested in Delhi in 2014).

An advisor to the education minister of Delhi and a parliamentary candidate from East Delhi for the Aam Aadmi Party (AAP), Atishi, 37, is the only woman of six AAP candidates for the 2019 elections to the Lok Sabha, parliament’s lower house.

Atishi–who dropped her last name, Marlena, a combination of Marx and Lenin, because it may have appeared Christian to voters–is the woman credited with the transformation of Delhi government schools. She has played a “pivotal role” in the turnaround, including reforms to teaching practices in classes 6 to 8  based on learning levels of children. This has now been extended to class 3.

Many of Delhi’s educational interventions can be extended nationwide, Atishi said. Children who fall behind in school tend to get left behind for years, if they are not taught according to their learning levels.

Her connection to politics helped “touch the lives of 1.6 million children” in Delhi, more than she ever could as a social activist in the late 2000s, she said.

Atishi has two masters degrees, both from Oxford University in the UK, one as a Rhodes scholar, on educational research. As an activist, she worked in Madhya Pradesh villages on “progressive education systems”, which gives more value to experience than rote memorization.

In an interview with IndiaSpend, Atishi talked about her political vision, as she contests her first parliamentary elections, the demand for full statehood for India’s capital and reforms in education.

As a young candidate, what is your vision for the country, and how has your work with the Delhi government influenced this vision? How different is being a politician to being an activist?

The vision is the same whether one is an activist or a politician. We are striving for greater equity in the society we are living in. But the problem is that as an activist, despite a large social movement or working with a nonprofit, the impact one can have is limited in scale. If you are involved in electoral politics, change can be brought about at a larger scale. That has been my experience working as an adviser to the government of Delhi. Being a part of an elected government, I was able to touch the lives of 1.6 million children. That is really the scale that politics can bring.

You are fighting from the East Delhi constituency where nearly 67% voters were women in 2014. As the only woman candidate for your party, do you think your candidature will have an impact here? What will your priorities be for women, given that women’s representation in India’s parliament is 12.6%, well below the global average of 24.3%?

One of the biggest issues women in Delhi face is safety. This hinders equity. If you cannot step out of your home safely, then it reduces access to education and employment. This is one of the reasons why the AAP has taken up the issue of statehood. The Delhi police has to come under the elected government. For the Centre, be it any party, security and law and order would mean issues in Kashmir, or insurgency in the north-east or issues in states like Chhattisgarh [left wing extremism], not local law and order issues in Delhi. For the police to be accountable, it has to come under the elected state government.

Would you say that we need more women in political parties?

Yes, 100%. It is only when any social group gets representation the issues get taken up in a large way.

After five years of schooling, at age 10-11 years, just over half (51%) of students in India can read a grade II level text, according to the Annual Status of Education Report, 2018. You have been credited with the transformation in education and school infrastructure in government-run schools in Delhi. Do you have specific national policy-level interventions in education planned if you get elected to parliament?

The is exactly the situation that Delhi faced. We found the 75% of children in Delhi government schools could not read their textbooks.This has been one of the issue we have been struggling with in past five years. We have found that there are interventions that can be helpful in improving learning levels and do feel many of the interventions can be implemented at the national level.

One of the methodologies that we have taken up is level-wise grouping. In a class there are children who are at different learning levels, and we found that the teachers ended up teaching children in the first few rows that have “brighter” children. Children who fall behind, stay behind for years. Until the children can be addressed at their own learning level, they cannot make fast progress.

The Congress has promised to allocate 6% of gross domestic product (GDP) to education in five years. How do you assess this election promise given your experience in education?

It is hard to be believe. They have had multiple terms and have done absolutely nothing. AAP came to power after 15 years of Congress rule and we have seen the state of the government schools.

6% of GDP is a good starting point. It is not just a question of budget, but also intent. It is not that governments are not spending money on education. But despite the expenditure the system is not functioning. That is the political intent that governments need to work on.

You have said that if Delhi is given full statehood your government will open new colleges and “85% seats will be reserved for children from Delhi”. What problems do you face now despite your success with school-level transformations?

The Delhi Universities Act (1922) prohibits the opening of any collegiate university in Delhi. The state government cannot open new colleges. Collegiate universities are the fastest way of expanding higher education, but the present parliamentary provisions prevent new ones. Every year, you have 450,000 children passing out of class 12 in Delhi and we have only 100,000 seats many of which are taking by students outside Delhi. Most children passing out of Delhi government schools are doing their under-graduation via correspondence, and, we, despite having money and intent, cannot open new universities.

The other issue is that when children from Dehi go to other states, they are only competing for a certain number of seats because they are reserved for students from that particular state. But in Delhi you have students coming from all over the country. Where are the children from Delhi going to go for higher education? We are not against people coming from outside, but there have to be adequate provisions for children here.

Legislation is an issue in this case and this can be done only at a parliamentary level.

The AAP is contesting the elections with the slogan “Poorna Rajya Banao Jhadu ka Button Dabao (Get full statehood, press the broom button)”. How do you plan to achieve this objective given the fraught relationship between your government and the Centre?

When we say this, we are expecting that there will be a regime change. If the Modi-government comes back to power, then they will not give Delhi full statehood because they have shown no interest in doing so in the last five years.

We will find support from other regional parties. Our approach is not that if we get our MPs elected to parliament they will be able to fulfill this promise on their own. We will need to build consensus like in the case of Telangana or Chhattisgarh. Even the CM [Arvind Kejriwal] has said that we will work towards getting full statehood.

In 2014, Rajmohan Gandhi, who stood for the AAP from East Delhi, was the runner up. What are you planning to do differently, given that the constituency has a mixed community, with parts that are Dalit- and Muslim-dominated? Do you see an anti-incumbency wave?

Most people here, unfortunately, do not know who their MP is, although they know their MLA or councillor. While there is a significant population of Dalits and Muslims here, there are also unauthorised colony voters who are biggest beneficiaries of our policies like laying of water pipelines and sewer line and other basic facilities that have been provided to them. Before this parties would say that the colonies are illegal and so the government cannot spend on you. Our government has set up a separate budget for unauthorised colonies across Delhi where 10,000 new streets are being constructed. More than 400 colonies have been given access to piped water.

So, there is a demographic that was systematically left out before our government came to power. Therefore, we do have a strong support base among the lower economic class. Further, the beneficiaries of improvements in the Delhi government schools and mohalla [neighbourhood] clinics are Dalits and Muslims who are the most marginalised. Given all this, I would say that there is a sense of anti-incumbency here.

The Yamuna, which flows through parts of your constituency, has 16 million faecal coliform parts per million (safe level is 500 PPM for potable water) and is heavily polluted. How do you plan to tackle this water quality crisis?

The Delhi Jal board, which is under the CM, is working on a massive sewage plant near Wazirabad industrial area where much of the affluents flow into the Yamuna. We are hoping that once that is ready it would improve the condition of the river significantly. It is a matter of time. We are also working on reviving Delhi’s lakes.

While you are crowdfunding to fight the elections, nearly Rs 1,716 crore worth of electoral bonds were sold between January and March 2019. How do you view this development and the use of electoral bonds in India?

The AAP has pioneered clean funding for political parties since its inception. Our first election in 2013 was crowd funded through our website, fundraising events and raised Rs 20 crore. We have always believed that if the election is funded by ordinary people, you will serve them better. You can see this approach when we ensure that private schools are not allowed to hike fees and electricity rates which have been maintained at the same rate for over four years. These decisions that go against vested interests are possible only if the party is funded by clean money.

We have followed the same philosophy and have been able to raise Rs 53 lakh [for Atishi] over the last few months and majority of the contributions are in the range of Rs 100 to Rs 500. Electoral bonds is the worst form of political corruption and institutionalises what we have always suspected when it comes to quid pro quo and lack of transparency. The BJP has got 95% of the money through this process and we have no information who those people or organisations are.

(Paliath is an analyst with IndiaSpend.)

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.

Courtesy: India Spend

The post ‘Congress Had Multiple Terms In Delhi, Did Nothing For Education’ appeared first on SabrangIndia.

Bengaluru: The 10% reservation announced for economically weaker sections (EWS) by the Bharatiya Janata Party (BJP) government “may be usurped by the wealthiest”, while the minimum income guarantee announced by the Congress party could be “a game changer” provided it does not come at the cost of social spending, which is currently too low in India, a new report by The World Inequality Lab, a research organisation, says.

Economic inequality in India is at record high levels and the next government will have to seriously address this issue, “rather than just focusing on growth as it has been the case until now”,  Lucas Chancel, co-director of The World Inequality Lab, said in a statement. Since the 1980s, the top 0.1% of earners have captured a higher share of total growth than the entire bottom 50% of the Indian population (12% vs. 11%), while the top 1% have received a higher share of total growth than the middle 40% (29% vs. 23%) of the population, the report notes.

It compares the promises that the BJP and the Congress have made ahead of the 2019 general elections to help the poor.

Under the Congress party’s Nyuntam Aay Yojana (NYAY or minimum income scheme) announced on March 25, 2019, the poorest 20% of Indian families (which are estimated to number 50 million families or 250 million people) would given a cash transfer of up to Rs 6,000 a month to ensure they have a monthly income of Rs 12,000 (or Rs 72,000 a year).

The BJP government announced a 10% reservation for EWS in the general category in January 2019. Parliament approved the Constitution (124th Amendment) Bill to provide 10% reservation in government jobs and higher education institutions for economically weaker sections, as IndiaSpend reported on January 14, 2019.

Congress’s minimum income plan could work
“The minimum income proposed by the Congress could be a “game changer” but not if it entails curtailing social spending, Chancel said.
Using simple projections, a minimum income set at Rs 72,000 per year would cost about 1.3% of GDP and benefit the bottom 33% of households, the report says. If it were set at Rs 1 lakh a year, the scheme would benefit the bottom 48% of households and cost 2.6% of GDP.

“In either case, a minimum income would represent a substantial improvement in living standards for the poorest segments of society,” the report says.

Highlighting the need for “more transparency” on income and wealth data, the report emphasises that minimum income must be in addition to improvement in social spending on education and health.

Reservation for EWS “more as a political stunt”
The BJP’s 10% reservation criterion includes households with an annual income less than Rs 8 lakh, agricultural land less than 5 acres (size of three football fields), residential house area less than 1,000 sq.ft, and residential plot less than 900 sq.ft (notified municipal area) or less than 1,800 sq.ft (non-notified municipal area).

Source: Tackling Inequality In India Is The 2019 Election Campaign Up To The Challenge? ( World Inequality Lab: March, 2019)
Note: 93% of Indian households earn less than Rs 8 lakh a year. This is based on 2020 levels utilising the nominal growth rate.

Given the thresholds, the report notes that:
 

• 93% of households are eligible for reservation based on the income limit
• 96% of households are eligible going by the agricultural land threshold
• 80% of households are eligible under the residential house threshold
• 73% of the population is eligible in urban areas with the less than 900 sq.ft residential plot threshold
•  

“Targeting bottom 50% households via the income threshold alone can be achieved by setting threshold to around Rs 200,000 at all-India level,” it notes, adding that the present threshold “tends to favour wealthy sections of society”, such that the framework “appears more as a political stunt than a reform genuinely seeking social justice”.

To better target the bottom 50% based on agricultural land area, the threshold should be set at zero acres (or households with no agricultural land) at an all-India level. In rural areas, “the threshold should be combined with a residence in rural areas criterion and should be set at 0.4 acres.”

Based on the housing criteria, the bottom 50% could be targeted if the threshold is reduced by half and set at 500 sq.ft in rural areas and 200 sq.ft in urban areas.

The building area is a “poor proxy of building value and and hence a poor proxy for EWS status” because the small building area may not necessarily mean low building value, particularly in urban areas. The combined asset value (land + building) must be around Rs 7 lakh in order to target the poorest 50% of households while households above this value of wealth should be automatically excluded from reservation benefits.

The Rs 7 lakh figure is based on prices in 2017 and assumes the same increase in wealth across different wealth groups.

More social spending, progressive taxation
So far, the issue of social transfers has been largely neglected from the political campaign, the report notes, adding that it is imperative that Indian increase its spending on health and education.

Analysing income, wealth and tax data, the report makes a case for progressive financing of social measures through progressive taxes on income and wealth. This could address “extreme inequality at the top, while financing social spending for bottom and middle income groups”, it says.

“Under simple assumptions, we find that a 2% tax on total wealth on households owning more than Rs 2.5 crore of wealth (that is the top 0.1% of households), would yield Rs 2.3 trillion or 1.1% of GDP,” the report says, adding, “99.9% of households would not be concerned by such a tax.”

An alternative 2% tax on land and buildings above Rs 2 crore would yield Rs 2.6 trillion (1.2% of GDP), impacting only the top 1% of the households.

This could nearly offset the 1.3% of GDP expenditure that the Congress’s minimum income guarantee of Rs 72,000 a year would cost, as per the report’s estimates.

(Paliath is an analyst with IndiaSpend)

Courtesy: India Spend

The post ‘Congress Income Scheme Could Work But Must Not Replace Social Spending’ appeared first on SabrangIndia.

Kekti Verma with two of her three daughters. She is yet to receive any help from the government since her husband Dhal Singh Verma, a farmer, committed suicide in 2017 in Sararidih, Chhattisgarh. He had a loan of Rs 600,000.

Unable to repay a Rs 600,000 loan, Dhal Singh hung himself from a mango tree in a nearby farm on October 6, 2017. He was 30 years old.

As many as 1,344 farmers–519 a year or, more than one per day–committed suicide in Chhattisgarh during the last two-and-a-half years till October 30, 2017, The Hindu BusinessLine reported on December 21, 2017. Baloda Bazar reported 210 farmer suicides, second highest in the state. IndiaSpend could not independently verify these data.

This number is similar to the number of farmers/cultivators who committed suicide in 2016–as IndiaSpend reported on March 21, 2018, based on a government response in parliament that month. The state contributed 9% of the 6,351 farmer suicides in India that year, fifth most in the country.

As Bharatiya Janata Party’s (BJP) longest serving chief minister, Raman Singh, 66, tries to win a fourth consecutive term in a state with nearly 4.3 million farmers–the state is 77% rural and 17% of the state gross domestic product comes from agriculture–our reporting shows he will face issues such as farmer suicides, discontent due to inadequate government purchase price for foodgrains, delays in the payment of Rs 300 per quintal (100 kilograms make a quintal) of paddy bonus promised before the last election, and inefficient crop insurance under the Pradhan Mantri Fasal Bima Yojana or PMFBY (Prime Minister’s Farm Insurance Scheme).

Despite despair and unrest roiling the state’s farms, a Lokniti-CSDS-ABP News pre-election survey, conducted in October 2018, indicated 42% of the farmers planned to vote for the BJP,  while 36% would vote for the Congress party. An average of four opinion polls indicated a close contest between the two parties with 45 seats going to the BJP, compared to 38 seats for the Congress in the 90-seat legislative assembly, BloombergQuint reported on November 8, 2018.

Why farming is important
IndiaSpend travelled to five districts–Balodabazar, Kabirdham, Rajnandgaon, Mahasamund, Kanker–in the Chhattisgarh plains to understand the concerns of farmers as the state goes to polls in two phases: November 12 and November 20. These are five of 15 districts in the plains that constitute nearly 69% of the 4.8 million hectares–equivalent to the size of Haryana–of net sown area in the state.

Chhattisgarh, also known as the rice bowl of the country, has set a target to produce 8.2 million tonnes of paddy in kharif (monsoon crop) 2017, and was among the top three rice-contributing states in 2016, the Business Standard reported on June 26, 2017.

As we said, nearly 70% of 25.5 million people in the state are engaged in agriculture, according to the website of the directorate of agriculture. Of these, 46% are small and marginal land holdings (below 0.5 hectares to less than 2 hectares), according to the 2015-16 agriculture census.
In an election year budget to woo farmers, the BJP government allocated 14% of its total budget (Rs 83,179 crore) towards agriculture and allied activities, higher than the budgets of 18 other states (average of 6.4%), as per analysis from PRS Legislative Research, a research organisation. This budget was also slightly higher than the 12% allocated by Chhattisgarh in 2017-18.  

Source: PRS Legislative Research

Note: 2017-18 (BE), 2017-18 (RE), and 2018-19 (BE) figures are for Chhattisgarh

In elections since 2003, the BJP’s seat share was roughly 55%, while the Congress’ was 13 percentage points lower, at 42%, on average, in a 90-seat assembly representing 27 districts.

Inadequate government support price, delayed bonus, and protests
Swades Tikam, 50, is a member of the zila kisan sangh (district farmers union), and is in the thick of the farmer agitation against the government.  

Swadesh Tikam, a farmer leader in CM Raman Singh’s constituency of Rajnandgaon in Chhattisgarh, said farmers are unhappy with the government’s policies and there have been nearly 100 farmer protests since the last election.

On September 18, 2017, he and few others were arrested from their homes in the wee hours of the morning and jailed in the neighbouring district of Durg. They, along with other farmer groups across the state, were planning a state-wide protest march the next day demanding a farm loan waiver, and the paddy bonus promised by the BJP in its 2013 assembly election manifesto.

“I have been arrested during protests before, but being arrested from my home was a first for me,” he said tightening a cloth tied like a turban around his head. “We must have had 100 protests since 2013, I think. This government does not want to negotiate terms with farmers and we want it replaced. We’ll support any other party that can show the work it has done for farmers.”

Tikam has a 9-acre paddy farm that his friends help cultivate since he is, often, busy mobilising farmers. “Income from farming has been inadequate. I moved from paddy to vegetables hoping to earn a better income. But soon realised that at the mandi (farm produce market) the commission agents were exploitative and the prices low. So I moved back to growing paddy.”

An acre provides him around 13 quintals of rice. If the rains are good and irrigation sufficient, there is an extra seven to 10 quintals. Each acre incurs an input cost of Rs 20,000, he said, which includes seed, fertilisers, labour etc. But with the vagaries of the weather and the low purchase price, even recovering the investment becomes a challenge, he said.

The median monthly per capita expenditure–monthly expense–for Indian farm households was Rs 1,375, indicating that 50% of the households spent less than that per person per month, IndiaSpend reported on September 24, 2018.

“Each day there are hundreds of people riding into Rajnandgaon town on their cycles with their lunch boxes. Almost all of them are farmers looking for work because farming alone will not help run a household,” said Tikam.

Around 100 km away in Kanker district of Bastar division, two paddy farmers, Manish Sinha (40) and Domendra Sahu (32), concur with Tikam. Despite having eight and three acres of land, respectively, Sinha runs a small restaurant and Sahu does electrical work and other odd jobs to make ends meet.

Sinha, in addition to the 8 acres in his village in Nandanmara, has leased five more to grow paddy. The lease arrangement requires him to part with a share of the produce with the farm owner. “I get around 20 quintals of paddy for an acre. I am able to make around Rs 4,000 off it after paying out all costs,” said Sinha. “Hiring a tractor costs Rs 1,000 an hour, labour is around 180 to 200 for the day per person, and I have a Rs 40,000 loan in the cooperative this kharif (monsoon) crop season. I will be lucky if I recover input costs.”

In addition, a new borewell would cost Rs 100,000 or Sinha would have to buy water from other farmers. Though elections are around the corner, we do not think much is going to change even if the party in power changes, both Sinha and Sahu said.

Sinha received a paddy bonus of Rs 18,000 for 60 quintals for 2016 and 2017, but is yet to receive any for 2013 and 2014. The Chhattisgarh legislative assembly passed the supplementary budget to spend Rs 2,400 crore for paying bonus to farmers in 2018 against paddy procurement and benefit nearly 1.3 million farmers registered with primary cooperatives of the state-run Chhattisgarh Marketing Federation, Business Standard reported on September 12, 2018. The bonus provides additional income above the procurement price.

“Farmers know that the 2018 paddy bonus will be made because of the elections and the BJP needs votes. Let’s see if the 2014 and 2015 bonuses are provided,” said Tikam.

The government declared it will buy 15 quintals of rice per acre, compared with 25 quintals in the previous year, the Financial Express reported on January 17, 2015. Farmers sell any produce above the 15 quintals to private traders who are likely to pay a price lower than the government’s.

In July 2018, the government purchase price for common paddy was increased by 13% to Rs 1,750, and for Grade A rice by 11% to Rs 1,770, but farmers said it was inadequate to sustain the trade.

“In 2013, the BJP manifesto stated that they would request the union government to increase the government purchase price to Rs 2,100 per quintal for paddy and provide a paddy bonus, effectively providing Rs 2,400 a quintal for farmers,” said Tikam. “Even this has not happened, while farmers on an average want it to be at least Rs 2,500 a quintal of paddy.”

Meaningless crop insurance
Ghanshyam Diwan has been trying to get his 20-acre paddy farm assessed by the patwari (village accountant) to claim insurance under PMFBY–the government’s crop insurance program–in Mokha, Mahasamund district, about 100 km east of Raipur. Part of his crop was affected by Maho, a pest commonly found on paddy farms. “This is happening for the first  time to me, and it is spreading across the farm,” he said. He may have to spend close to Rs 4,000 an acre to fight the pest or simply lose all the produce.  

Ghanshyam Diwan’s 20-acre paddy farm has been affected by Maho, a pest. He is trying to get a survey done to assess the loss to claim insurance under PMFBY.

Another farmer, Daniram Dhruv, who has a 2-acre paddy farm, received Rs 40 from an insurance claim from the PMFBY in 2017.  Even his son, Prem Dhruv, who is a chairperson of the cooperative, did not know how the local survey for insurance came up with the Rs 40 figure. Prem was unable to share data on the insurance claims because of ongoing technical updates to his system, he told IndiaSpend.

A number of farmers from across the country have also made allegations that money is being deducted from their accounts and they are being enrolled for PMFBY without prior information, The Wire reported on March 31, 2017. This is because farmers in the notified area who possess a crop loan account/kisan credit card account (called as loanee farmers) to whom credit limit is sanctioned/renewed for the notified crop during the crop season would need compulsory coverage, the PMFBY guideline says.

One of the objectives of the PMFBY is to “provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases”, according to this PMFBY guideline.

For the kharif or monsoon crop in 2016, about 1.4 million farmers were insured under PMFBY and the Restructured Weather Based Crop Insurance Scheme (RWBCIS)–insurance against weather-based calamities like rainfall, drought, humidity etc. Nearly 6% of these farmers benefited, as per government data. In the 2017 kharif season, the number of farmers who benefited increased 36 percentage points to 43%, although the total farmers insured fell by 7% to 1.3 million.
 

Source: Pradhan Mantri Fasal Bima Yojana (data till October 2018)

The Chhattisgarh government declared 96 tehsils (an administrative area) from 21 districts drought-hit, after receiving assessment reports from district collectors, The Indian Express reported on September 12, 2017. “The government has disbursed Rs 5.46 billion [Rs 546 crore] to the districts for immediate relief and Rs 3.30 billion [Rs 330 crore] had been distributed so far,” said Prem Prakash Pandey, state revenue minister, Business Standard reported on September 15, 2017.

But in Baturakacchar village of Kawardha, a drought-affected village, 32-year-old Jeevan Yadav, a sugarcane and paddy farmer and block president of the Rashtriya Swayamsevak Sangh (RSS)-affiliated Bharatiya Kisan Sangh (BKS), did not receive any relief in 2017. He has 12 acres of sugarcane and four of paddy out of which around 10 acres dried because of the drought, he said.

“Of the 16 villages under the cooperative society which my village falls in, only one got any drought relief from the government,” said Yadav.

The assessment for farm insurance is based on an average estimate made by the agriculture department, explained Doman Chandravanshi, district secretary of BKS, who has a 60-acre farm, where he grows sugarcane and paddy, in Patharra panchayat in Kawardha. The claim is considered if the crop production falls below the estimate. Further, in order to be eligible for insurance, farmers in a panchayat must have at least 15 hectares of land of the notified crop.

In Kawardha, the average is seven quintals an acre for paddy. With the quality of seeds and fertilizers, even scanty rainfall provides more than that quantity which means that, in most cases, a claim for crop loss cannot be made. “This means that despite incurring a loss, insurance is meaningless,” said Chandravanshi.

The assessment is based on a seven-year average yield or threshold yield for a notified area, said D.K. Mishra, joint director, agriculture in Chhattisgarh. “The actual yield is based on four crop cuttings in a season taken at the panchayat level. If there is a calamity, the actual yield is subtracted from the threshold yield average,” he said.

Further “farmers would have taken loan for only certain amount of land for which insurance would have been provided”, said Vishal Kharbade, regional manager of the Agriculture Crop Insurance Company, a public sector crop insurance company, in Raipur. “If they grow multiple crops, a calamity need not necessarily affect all crops. Sometimes farmer may not know about these details.”

Jeevan Yadav (extreme right) and Doman Chandravanshi (centre) are members of the RSS-affiliated Bharatiya Kisan Sangh in Kawardha. Party affiliations do not matter when it comes to farm distress, they say. There have been over 20 protests since the last elections.

Farmers are also impacted by market forces. When sugarcane produced is in excess of the sugar factories’ demand, farmers are forced to sell to to jaggery-making units at throwaway prices. Last year, some farmers sold at a price as low as Rs 80 a quintal, Yadav said. Sugarcane is not procured by the government.

Yadav spent around Rs 35,000 to Rs 40,000 an acre on sugarcane for seed, water, fertilizer, labour and transportation. He had an income of Rs 91,000 in 2017.

Their affiliation to the RSS has not stopped Yadav’s farmers union from agitating against the BJP government. We’ve had more than 20 protests since 2013, he said.

“In 2015, nearly 10,000 farmers here protested for the Rs 50 bonus and transportation cost for sugarcane, which had been stopped,” said Chandravanshi, district secretary of BKS. “We do not look at party affiliations on matters of farm distress.”

For Chandravanshi and Yadav, farm distress is a major election issue but they were non-committal on which party they would vote for.

Cycle of debt and suicide
According to the state’s agriculture and cooperative department officials, 71% of the Rs 4,474.15 crore disbursed to the farmers was repaid between July 1, 2016, and May 31, 2017, the Business Standard reported on June 26, 2017.

But this does not take into account the money that farmers borrow from informal moneylenders at high interest rates.  

Gajendra Singh Koshle, 28, a bachelor of science graduate, and farmer in Arang village in Raipur district, has taken a loan of about Rs 26 lakh, partly for his father’s treatment, in 2013. These include loans taken by his father from the agricultural cooperative, a tractor loan from a bank, informal loans for the farm, his and his siblings’ weddings and demonetisation, he said. Koshle, who owns 10 acres of land and has leased another 15, is part of the farmers’ movement against the government’s agriculture policy.   

Gajendra Singh Koshle in Arang in Raipur district has a Rs 26 lakh loan for his paddy farm. His loans include those taken for weddings, buying a tractor, and repaying existing loans.

In 2015, a variety of paddy that he had hoped would provide income failed due to the drought. His winter crop was affected by Maho for which he did not get insurance relief. Further, he wasn’t paid the paddy bonus for the paddy procured for the kharif season, and the inadequate procurement price for paddy made things worse.

“I decided to sell my land to repay some of the debt. But by the time I negotiated the terms with the buyer, demonetisation hit and they backed out,” he said. “My loan from the moneylender was at an interest rate of 5% per month. The stress on repayment is high.”

In Mokha village in Mahasamund, 60-year-old Manthir Singh Dhruv’s Rs 600,000 loan burden forced him commit suicide by hanging himself to a tree in August 2017. “He had loan from banks and the cooperative, but the drought and delays in bonus made it difficult,” said Mohan, Manthir’s 29-year-old son. He had also dug a borewell for nearly Rs 70,000 for his seven-acre paddy farm.

The government has not provided any compensation since his father, Manthir Singh Dhruv committed suicide, says Mohan Dhruv of Mogha in Mahasamund. He received Rs 50,000 from the Congress, he added.

“We’ve received around Rs 50,000 from the Congress party but nothing from the state, even though I have a government order requesting me to submit documentation for compensation,” said Mohan, showing the order in his possession. He will not vote for the government.

In Kawardha, the family of farmer Santosh Sahu, who committed suicide by consuming sleeping pills in July 2017, is upset. “My father’s suicide and the government’s indifference will be a factor for my vote,” Vikas Sahu (21) told IndiaSpend at his home in Dehri village. Santosh had a loan of around Rs 15 lakh, including that for a new jaggery-making unit he had set up.

Vikas Sahu, 21, was promised a job in the police department by the politicians when his farmer father, Santosh Sahu, committed suicide in Dehri village of Kawardha. But the promise was not fulfilled, he said.

“We still have bank officials asking for repayment. The member of the legislative assembly visited us, and the government promised to employ me in the police force, but nothing has happened since,” said Vikas, who shares the home with 18 other members, including his mother, brother, and uncles. About 2 acres of Santosh’s land is with moneylenders.

‘Farming isn’t being considered an economic activity’
“The issue is that agriculture is not being seen as an economic activity,” Devinder Sharma, an agriculture expert, told IndiaSpend. “If you make agriculture unproductive and non-remunerative, people will move out of farming. Successive governments have been following this policy.”
Farmers want an assured income and so they are not moving from paddy as governments procure it, he said.

Both the central government and the state government have a role to play in improving agricultural policies. As farmers reel under the impact of low income and bad loans, experts believe that just announcing government procurement prices isn’t enough, but any procurement policy also needs to be implemented well.

“The minimum support price (MSP or government purchase price) regime must not just be a declaration of prices, but should also be backed by effective procurement,” said Sukhpal Singh, professor at the Centre for Management in Agriculture at the Indian Institute of Management in Ahmedabad (IIM-A).  “There is no meaning in talking about MSP if it isn’t implemented in terms of procurement, which is now restricted to a few crops and a few states.” Chhattisgarh is doing well in terms of procurement and using it for public distribution system, he noted.

He is also concerned about the PMFBY. There are issues of awareness, delays in payment, and the assessment for insurance is done only at the block or village/panchayat level which does not help individual farmers affected. Although the premium paid by the government is high, the programme has been of limited use to farmers, as proper information is not shared with farmers about how the claim is assessed, and the process to claim benefit, said Singh.

IndiaSpend sent an email and a reminder for comment to Radha Mohan Singh, minister of agriculture and farmer welfare, and the secretary to the ministry. This story will be updated as and when they respond.

Further, experts are concerned about the unstainable model of farming in the state. “Chhattisgarh must not follow the Punjab farming model” which is water intensive, with high use of pesticides, and farm indebtedness. “It has an opportunity to create an ecologically sustainable model for agriculture which includes forestry,” said Sharma.

Given the present circumstances, doubling of farm income by 2022 can happen only on paper, he noted.

In Baloda Bazar, a district dotted with seven cement factories that have also acquired farmland for mining, Kekti, whose husband committed suicide because of the loan burden, makes around Rs 100 a day from farm labour. “I have enrolled to finish my 12th standard and want to work for my girls,” she said.

(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend
 

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Well water availability has been falling across India, and in Kerala, it fell by 10 percentage points to 62% in the decade ending 2011. In 2008, the district administration of Thrissur initiated Mazhapolima, a scheme to recharge wells through rooftop rainwater harvesting. Over a decade, the scheme has benefitted more than 100,000 people and its success has prompted the state government to extend it to all districts.  
 

A construction worker, 45-year-old Valiyadath, his wife Zeenath, and their three teenage boys live in the coastal Padiyur panchayat of Kerala’s Thrissur district. They have benefited from the district administration’s Mazhapolima scheme, through which villagers were provided a 75% subsidy to install rooftop rainwater harvesting systems (worth Rs 4,500). Since 2008, close to 30,000 units have been installed, benefitting 100,000 people. Officials estimate that many more people have installed units on their own, although data are not available.
 
As per a February 2013 impact assessment report, about 78% of respondents in the coastal and midland area reported a “significant improvement in the groundwater availability”.
 
Cycles of plenty and scarcity
 
Every year, from February until the monsoon arrives in June, Thrissur faces water scarcity. Proximity to the sea causes salt water ingress, limiting the depth to which families like the Valiyadaths can dig borewells for water. Shallower, open dug wells have therefore been an important source of water traditionally.
 
However,  poor maintenance has put many wells into disuse while rainfall has been getting increasingly erratic. These factors, along with the loss of traditional waterways, drainage systems, wells and ponds, have led to scarcity of water in the dry season.
 
The state now faces an extended dry season from February until the end of May. In the decade ending 2011, household well-water availability in Kerala fell by 10 percentage points to 62%.
 
This mirrors the situation in the rest of the country–average well-water levels in January 2016 were lower than the average between 2006 and 2015 across India, IndiaSpend reported in November 2016. Only 35% of wells showed any rise in water level, while 64% showed a decline.
 
As per the United Nations, an area with an annual per capita availability of less than 1,700 cubic metres (m3) of water is considered ‘water-stressed’; less than 1,000 m3, ‘water scarce’.
 
In 2011, per capita water availability in India was estimated to be 1,545 m3, making it water stressed, IndiaSpend reported in December 2017 based on an assessment by the water ministry. Availability was expected to decline further to 1,341 m3 by 2025 and to 1,140 m3 in 2050, which would make the country severely water-stressed.  
 
In Thrissur, 450,000 wells served the three-fourths of its three million population who were dependent on well water, which averages to four people per well. Yet, families such as Valiyadath’s faced water scarcity for months every year.
 
The Thrissur district administration, under the stewardship of the then Collector V.K. Baby, decided to initiate Mazhapolima (Bounty of Rain), a water harvesting programme, in 2008. The idea was to artificially recharge groundwater by harvesting rooftop rainwater directly into dugwells.  
 

 
Dugwells: Disuse, and revival
 
Traditionally used to access groundwater, dug wells have rapidly fallen into disuse. In a little over two decades to 2014, the number of dugwells reduced by 9%, from 9.6 million to 8.7 million across 661 districts of India, according to the 5th Minor Irrigation Census.
 
Meanwhile, with groundwater becoming scarce in shallow aquifers, the number of deep tubewells (depth of 70 metres or more with discharge of 100-200 m3 per hour) increased by 86%, from 1.4 million to 2.6 million between 2006-07 and 2013-14, the irrigation census showed.
 
As one of the southern-most states in mainland India, Kerala is among the first to receive the monsoon (southwest) rains. The state is estimated to receive nearly 3,000 millimetres (mm) of rainfall annually. By comparison, Gujarat’s Kachchh district, among the driest regions of the country, receives 378.2 mm, 1/10th of Kerala’s despite being geographically larger.
 
Yet, Kerala was declared drought-hit in April 2017. It received only 33% of normal rainfall from June to December the previous year, as Scroll.in reported in April 2017. Between 1951 and 2010, the annual and monsoonal rainfall decreased on average by 1.43 mm and 2.42 mm per year, respectively, according to this report by the Indian Meteorological Department.
 
Groundwater had been the prime source of water to meet the domestic needs of more than 80% of rural and 50% of urban population, according to the Environment Information Centre. Water scarcity due to inefficient water management, particularly poor maintenance of dug wells, has affected vast numbers among Kerala’s 33 million population.
 
“Ever since government programmes ensured piped water supply in the 1970s, people have forgotten to protect wells in homesteads,” Jos C. Raphael, Secretary of the Mazhapolima scheme, told IndiaSpend, “Piped supply has reduced drudgery, but the loss of traditional waterways, drainage systems, wells and ponds, and erratic rainfall have led to a serious water scarcity problem in Kerala.”
 
Raphael and his team have been instrumental in engaging the community to take up recharge of wells through rainwater harvesting in Thrissur.
 
How Thrissur got it right
 
Mazhapolima has been implemented all across Thrissur district, including its highlands, midlands and coastal parts. Nearly 35% of the units have been installed in homes located in coastal regions and 32% each in lowlands and highlands. The remaining one percent have been installed in institutions like police stations, government schools and panchayats.

 
 
Rainwater harvesting units are of two types: One with a filter made of sand, charcoal and pebbles; and the other with a nylon or cloth filter.
 
In each unit, plastic pipes direct rooftop rainwater through a filter tank, before directing it to open wells. The initial gush of water is let out to avoid any contaminants or dirt from mixing with the well water. This water percolates into the soil too, and is not wasted.
 
One unit is estimated to cost Rs 4,500, of which the government pays 75% and the beneficiary pays the rest (Rs 1,125). Funds from ongoing government programmes such as the Integrated Watershed Management Programme, the Mahatma Gandhi Rural Employment Guarantee Act (MGNREGA) and the district disaster management fund have been deployed. The Kerala State Industrial Development Corporation and private donors have also contributed.
 
In 2012, the Vellangallur block in Thrissur decided to pilot a cluster approach. Since numerous panchayats fall under the larger block, it decided to set up a lottery system, and Padiyur village was chosen from the lot. The panchayat utilised Rs 1 lakh from its ‘plan fund’–decided by the panchayat at the beginning of the year–to install units in 38 homes, one of which belonged to Valiyadath.
 
When the Valiyadath family moved to Thrissur in 2008, the water crisis was severe. “I used to walk several kilometres carrying pots to fill water at a public stand-post or the well near it. We needed at least five pots a day,” Zeenath Valiyadath said. An average pot of the kind Zeenath talked about carries 15 litres. The 12th Five Year Plan aimed to provide at least 55 litres per person per day in rural areas.
 

Jawab and Zeenath Valiyadath are among the beneficiaries of Mazhapolima, a district administration scheme that provides subsidies on rainwater harvesting kits for recharging dug wells. Zeenath no longer has to travel long distances to fetch water.
 
A borewell that Valiyadath installed in his house after the drought of 2017 struck water at 30 feet. “Beyond that fresh water will mix with saline water,” he explained, adding that the water recharging activity has made the groundwater more suitable for domestic use.
 
Not too far from the Valiyadath household, V.V. Laila, 61, lives alone. “After my mother passed, I, being the eldest, looked after my siblings. I remember carrying my younger sister and a pot of water from the well at the same time,” she said. “I’ve had to go through a lot to source water in the past.”
 
Living alone, her need for water is minimal and she does not have a piped water connection. “I use water from the well here for non-drinking water requirements. For drinking needs, I use the well close by,” she said.
 

V.V. Laila, 61, lives alone. Although water in her well turns turbid during the dry season, the Mazhapolima scheme has ensured that the well does not dry up. She uses this water for non-drinking purposes during the summer.
 
The well-water is yellowish, which shows the presence of iron. “Before the rain, I ensure that I clean the well. I place the chair on the steps leading to the porch to clean,” she said, adding that during the rains, the well water clears up.
 
As per this February 2013 impact assessment report, about 78% of respondents in the coastal and midland area, as we said, reported a “significant improvement in the groundwater availability”. The results have been less visible in the highlands, where 68% of respondents said the difference was “minimal”, a result the report blamed on the topography of the area. “[D]ue to the moderate to steep slopes and the porous nature of the formation the recharged groundwater may drain very fast to the valley portion. Because of this reason Mazhapolima project has not shown any significant impact on the groundwater regime in the highland area,” it said.
 
Maintenance is key
 
A majority of the respondents (85%) cited in the 2013 report said there is a need for periodic
 
maintenance of the recharge systems, use of quality materials and beneficiary participation.
 
“Often, in households below the poverty line, the system falls into disuse,” Raphael said. Maintenance of the pipe and addition of the charcoal and sand filter costs around Rs 2,000 every year, and many families can not afford it. However, Raphael said, “If the unit is maintained and cleaned well, a basic permeable filter [with a nylon net or cloth] should work.”
 
Pipes and filters tend to accumulate dirt and leaves over time, and are not easy to clean. Funds for maintenance are not available from MGNREGA as the work is skilled/semi-skilled; MGNREGA is used only for unskilled work.
 
Considering that more than 90% of MGNREGA participants are women–as the men tend to find higher paying jobs elsewhere–funds are required for women workers’ capacity building and training before they can take up maintenance-related work. “We are hoping to include it in our panchayat plan for next year,” said Sivadasan C.A., panchayat member in Padiyur village. Nevertheless, the final onus for conserving and maintaining will be the household owners’.
 
Although the Mazhapolima model has been extended to all districts, its monitoring is at the panchayat level. The data on its impact are anecdotal so far, based on household feedback.
 
Since 2008, Mazhapolima has been able to install close to 30,000 units, with over 100,000 beneficiaries. Many more people have installed units individually, Raphael estimated, but data are not available.
 
(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend
 
 

The post Harvesting The Rain: How One Kerala District Is Solving Its Water Problem appeared first on SabrangIndia.