MUMBAI – “Peanuts” was how one rural politician described a 6,000 rupee ($84) yearly handout to small farmers promised in Friday’s budget as Indian Prime Minister Narendra Modi tries to secure the support of rural voters in a forthcoming election.
Recent polls predict Modi’s ruling Bharatiya Janata Party (BJP) to emerge as the biggest party in the vote which is due by May, but that it will fall short of a majority as the main opposition Congress party gains ground.
Late last year the BJP lost power in three big agrarian states to Congress, which has promised to forgive farm loans as Indian farmers struggle with huge debts and falling crop prices.
Several farmers told Reuters after interim Finance Minister Piyush Goyal finished presenting this government’s last budget that it had not swayed them to vote for Modi’s party.
“The government is trying to lure farmers by offering peanuts,” said Raju Shetti, a farmer leader and member of parliament in the western state of Maharashtra. “These measures will hardly make any difference to our earnings.”
Shetti said the proposed sum was negligible compared to the losses incurred by farmers due to the fall in crop prices in recent years, blaming Modi for resorting to big imports despite bumper local crop production in a bid to keep inflation in check.
A steep drop in prices of crops like vegetables and pulses led to protests across the country in 2018. In response, the southern state of Telangana, run by a regional party, has started paying farmers 20,000 rupees per hectare a year.
“Our debt burden has risen because we have been making losses,” said Jitendra Nirwal, who grows sugarcane in the northern state of Uttar Pradesh. “The government should have waived farm loans.”
Indian farmers borrow from banks to buy seeds and fertilizers, but erratic weather and falling crop prices cripple their ability to repay. After defaulting on bank loans, farmers were forced to borrow from private moneylenders charging exorbitant interest rates.
In 2008, the then Congress-led federal government announced a national loan waiver programme costing nearly 720 billion rupees in a move that helped it retain power the next year. Its new governments in the states of Madhya Pradesh, Rajasthan and Chhattisgarh have promised or already forgiven farm loans worth billions of dollars.
Congress President Rahul Gandhi has also promised to provide the poor with a minimum income if they come back to power.
“Giving them 17 rupees a day is an insult to everything they stand and work for,” Gandhi said in a Tweet.
The BJP, in response on Twitter, said Gandhi had not “understood a thing from the budget” and that the 6,000 rupees to be paid to farmers was “not their net income but a relief measure to supplement their income; along with host of other steps taken for their welfare”.
The party’s stated goal is to double farmers’ income by 2022.
“I lost more than 80,000 rupees last year after prices plunged,” said Kiran Shelke, an onion grower in Maharashtra’s Nashik district. “If the government can ensure higher market prices, there won’t be any need for the 6,000 rupees.”
February 1, 2019
Categories: Budget India