23 October 2020: The Indian Express Editorial Analysis
1) Politics of Economics-
- What does India’s political economy look like in the aftermath of a series of high-profile economic reforms that the Narendra Modi government has undertaken?
- The economic effects of these reforms will play out over the long run. This piece is not an economic assessment of these policies.
- It is a reflection on the political economy of the Modi model, which is now acquiring systematic contours.
- First, broadly speaking, macro-economic stability matters.
- But, politically, the government remains convinced that inflation carries serious political risks. This is going to remain a cornerstone of macro political economy.
- Second, the relative bargaining power of capital in relation to labour will continue to radically favour capital. This has been the trend for the last two decades.
- In emerging economies, there will be a race to the bottom as far as sensible protections for labour go. Indonesia has, like India, gutted(disappointed) labour protections.
- The previous regime of labour laws was deeply broken and it served neither the cause of capital efficiency nor labour protection.
- So, it is politically pointless to defend the status quo(existing affairs).
- Politically, it was easy to portray the small section of the economy that has protected labour as an aristocracy impeding the progress of other excluded labour rather than as a bulwark against capital.
- But the migrant labour crisis throws up another puzzle. The degree of hardship inflicted on migrant labour is still not showing up in any serious political backlash.
- One explanation is the politics of faith — like demonetisation, this punishment has not deeply broken faith in Modi.
- But there may be something deeper: That migrant labour has been always so radically disenfranchised in political terms that they have little faith that any alternative dispensation would have done better for them.
- So, no political strike against Modi.
- Third, in agriculture, the problem is similar to labour — any position that simply involves defending the status quo loses political support.
- Whether or not these bills will result in greater prosperity for farmers is an open question.
- It depends on the follow-up. The political consequences of the agriculture bills are far-reaching in a state like Punjab where MSP is very significant.
- But the political effects will be largely concentrated in a few states like Punjab and Haryana.
- In fact, for those not in agriculture, the bills strengthen the government’s reformist credentials.
- Ideologically, it is not easy for the Congress to mount an opposition to the bills, because their policies were headed in the same direction, even if they might have been more nuanced.
- Also, nothing in the bills precludes(prevents) the state from continuing with MSP. So, the whole argument will turn on convincing affected farmers of the government’s intentions.
- The events in Punjab could yet spiral into a crisis if not handled well. But there is little evidence of a national opposition to the bills.
- Fourth, state-capital relations. State and capital relations will remain very politically cosy(comfortable).
- In significant sections of Indian capital, there is a deep commitment to the Hindutva project.
- The government understands that control of the information order requires control of capital; so, it will superintend it.
- Corruption will be more structural rather than transactional.
- This has the advantage of being able to mobilise all the necessary funds, and yet at the same time giving the impression that transactional corruption has come down.
- There are three areas of discretion that will continue to be the subject of state-capital negotiations.
- First, there is no evidence to suggest that the channelling of credit will not, at the margins, continue to be directed to the favourite players.
- The Insolvency and Bankruptcy Code was a good legislation.
- But, as Urjit Patel argued in Overdraft, the government undermined its own legislation, largely it seems so that it could still exercise discretion.
- So the political economy suggests that we are not going to see major financial sector reforms soon.
- With Atmanirbhar Bharat, there is more scope for negotiation on tariffs in different sectors. It will be interesting to see if these negotiations are governed by an economic or a political economy logic.
CONCENTRATION OF CAPITAL:
- Finally, this government is comfortable with greater concentration of capital.
- The argument that there is a need to create national champions who can leverage scale will be used to justify the dominance of the Ambanis over the Indian economy to a point that is unhealthy.
- But can this nexus(link) be converted into a political narrative of corruption? This is going to be difficult.
- In the previous anti-corruption movement, the media was complicit(involved) in the campaign and it acquired plausibility(credibility) because of existing high-profile transactional corruption.
- Structural corruption will be harder to convert into a political narrative.
- Fifth, there is a deepening of the new welfare state.
- Interestingly, the Modi government’s focus here is on six of the new indicators that the Oxford Multi-Dimensional Poverty Index uses to supplement traditional indicators of health and education.
- Cooking fuel, water, sanitation, electricity, housing and assets. These schemes have several political advantages.
- These are vital initiatives. They target women, and are visible. The real question is whether outcomes are translating into results.
- For instance, the Ujjwala Yojana was quite successful in reaching its target of the number of new connections.
- But, according to government data, per capita cylinder use under the scheme in 2019 was 3.28 refills, suggesting that the gap between the number of connections and the usage you would expect based on those connections was very wide.
- But these are the six schemes to monitor closely.
- We need more objective scrutiny of these schemes of the kind MGNREGA was subject to under UPA.
- But a lot will depend upon whether the government narrative on these schemes can be countered with some real evidence that these schemes are not delivering.
- From a political point of view, the challenge will be that while some of the government’s claims may turn out to be inflated, will the shortfall be sufficient to demonstrate government failure?
- Finally, there is the political economy of federalism that has come under immense strain because of GST and the government’s encroaching on the state’s rights in recent legislation.
- But the blunt truth is that, in the final analysis, the potency of this fault line depends on the states.
- If the BJP wins Bihar and Bengal, the potential of significant revolt on federalism issues will diminish.
- Despite economic headwinds, it has not been easy to use the economy as a point with which to attack the Modi government.
- It has still positioned itself as a breaker of the status quo.
- The opposition will have to think more intelligently about the political economy of protest to counter the new political economy of reform.
2) Healthy and Wise-
- For anyone who wishes to understand the complex interplay of nutrition, food systems and farmers’ welfare, the insights shared by Prime Minister Modi on World Food Day are a crash course worth taking.
- One of the most important highlights from the speech was the focus on the production of millets, also now known as “nutri-cereals”.
- Giving examples of nutri-cereals like jowar, bajra and ragi, PM Modi also shared how the Food and Agriculture Organisation (FAO) has endorsed India’s call for declaring 2023 as the “International Year of Millets”.
- He spoke at length about how the government is incentivising the production of nutri-cereals to increase the intake of diverse and nutritious diets, improve their availability in markets and bring benefits to small and medium farmers, who are the main cultivators of coarse grains.
- The three major millet crops currently growing in India are jowar (sorghum), bajra (pearl millet) and ragi (finger millet).
- Along with that, India grows a rich array of bio-genetically diverse and indigenous varieties of “small millets” like kodo, kutki, chenna and sanwa.
- Major producers include Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.
- High in dietary fibre, nutri-cereals are a powerhouse of nutrients including iron, folate, calcium, zinc, magnesium, phosphorous, copper, vitamins and antioxidants.
- They are not only important for the healthy growth and development of children but have also been shown to reduce the risk of heart disease and diabetes in adults.
- Usually grown by small and poor farmers on dry, low-fertile, mountainous, tribal and rain-fed areas, millets are good for the soil, have shorter cultivation cycles and require less cost-intensive cultivation.
- These unique features make millets suited for and resilient to India’s varied agro-climatic conditions.
- Moreover, unlike rice and wheat, millets are not water or input-intensive, making them a sustainable strategy for addressing climate change and building resilient agri-food systems.
POOR PERSON’S FOOD:
- In the 1960s before the Green Revolution, millets were extensively grown and consumed in India.
- Indian Council of Agricultural Research data shows that bajra constituted nearly 46 per cent of the crop production as opposed to 13 per cent for rice in the kharif season.
- Similarly, chickpea stood at 42 per cent for the rabi season against a measly 4.3 per cent for wheat.
- With the Green Revolution, the focus, rightly so, was on food security and high-yielding varieties of wheat and rice.
- An unintended consequence of this policy was the gradual decline in the production of millets.
- Unfortunately, millets were increasingly seen as “poor person’s food” in contrast to the consumer perception around more refined grains like rice and wheat.
- The cost incentives provided via MSPs also favoured a handful of staple grains.
- In parallel, India saw a jump in consumer demand for ultra-processed and ready-to-eat products, which are high in sodium, sugar, trans-fats and even some carcinogens.
- This need was again met by highly-refined grains. Contrary to the popular belief, this phenomenon was not restricted to urban areas.
- With the intense marketing of processed foods, even the rural population started perceiving mill-processed rice and wheat as more aspirational.
- This has lead us to the double burden of mothers and children suffering from micronutrient deficiencies and the astounding prevalence of diabetes and obesity(weight).
- To address this situation, a multi-pronged strategy has been adopted for the promotion of nutri-cereals by the Modi government.
- The first strategy from a consumption and trade point of view was to re-brand coarse cereals/millets as nutri-cereals.
- As of 2018-19, millet production had been extended to over 112 districts across 14 states.
- Second, the government hiked the MSP of nutri-cereals, which came as a big price incentive for farmers.
- As we compare the data on MSPs for food crops from 2014-15 against 2020, we see that the MSP for ragi has jumped a whopping 113 per cent, followed by bajra and jowar at 72 per cent and 71 per cent respectively.
- MSPs have been calculated so that the farmer is ensured at least a 50 per cent return on their cost of production.
- Third, to provide a steady market for the produce, the Modi government included millets in the public distribution system.
- Fourth, the Ministry of Agriculture & Farmers’ Welfare is running a Rs 600-crore scheme to increase the area, production and yield of nutri-cereals.
- With a goal to match the cultivation of nutri-cereals with local topography and natural resources, the government is encouraging farmers to align their local cropping patterns to India’s diverse 127 agro-climatic zones.
- Provision of seed kits and inputs to farmers, building value chains through Farmer Producer Organisations and supporting the marketability of nutri-cereals are some of the key interventions that have been put in place.
- And finally, the Ministry of Women and Child Development has been working at the intersection of agriculture and nutrition by setting up nutri-gardens, promoting research on the interlinkages between crop diversity and dietary diversity and running a behaviour change campaign to generate consumer demand for nutri-cereals.
- As the government sets to achieve its agenda of a malnutrition-free India and doubling of farmers’ incomes, the promotion of the production and consumption of nutri-cereals seems to be a policy shift in the right direction.
- Instead of working in silos, this multi-ministerial policy framework is a strategic move towards building an Atmanirbhar Bharat which resonates(impacts) with the global call for self-sufficiency and sustainable development.
- For our part, we can begin the jan andolan by taking small steps towards choosing healthier foods, which are good for the environment and bring economic prosperity to our farmers.