A Regular, Unconditional Basic Income Ideal For India: Varun Gandhi
In an interview with BW Businessworld’s Suman K Jha, the MP talks about possible solutions to the crisis
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BJP MP Varun Gandhi has come out with a book on farm distress, A Rural Manifesto, where he talks about the problems plaguing rural India. In an interview with BW Businessworld’s Suman K Jha, the MP talks about possible solutions to the crisis.
Why is agrarian distress such a recurring theme in India?
Rural distress, in fundamental terms, remains more of a continual issue than a recurring one. Throughout my travels to the Indian rural hinterland, one could sense that the existence of a village, largely dependent on agriculture, remains fragmented along delicate faultlines. Our policy apathy and inefficiency to repair the faultlines also contributes to agrarian distress. Post 1991, agriculture has grown at 1 per cent on average, while industry has grown at 8 per cent. This has led many farmers to leave farming and seek employment in towns and cities.
Why has farm distress failed to capture the attention of policymakers?
Despite the fact our policymakers have historically prioritised fostering urban investments, one cannot say that farm distress has failed to attract policymakers’ attention. With marginal farming proving uneconomic and almost 72 per cent of India’s farmers being small or marginal in nature, rural distress remains a subject matter of immense policy interest and a big electorate issue at large. However, we also need to keep in mind that farmers historically do not vote in a bloc.
Is farm loan waiver really a solution to the farmers’ woes?
It is essentially an emergency measure rather than a kneejerk reaction to agrarian distress. It is a short-term arrangement till credit culture improves alongside rising farmer incomes.
Indebted farm households have increased from 25 per cent in 1992 to 52 per cent in 2016. The average debt of an agricultural household stands at Rs 1.04 lakh, whereas the average monthly income stands at Rs 8,900 — thus, average debt is roughly their annual income. So what we need is freedom from indebtedness for our farmers.
To manage indebtedness, state-level debt relief commissions need to be established and strengthened. The commission should be empowered to waive off a percentage of the debt, while imposing a general moratorium on debt repayment or declaring an area as distress affected if the need arises. The farmers of such areas can then seek farm loan waiver (including private loans from moneylenders). Here, the Kerala State Debt Relief Commission sets a good precedent.
What additional measures are required to make the Indian farmer prosperous?
Apart from the measures stated above, we also need to explore the Rythu Bandhu scheme of Telangana, wherein each farmer receives a certain allowance basis landholding (on a per hectare basis), capped at a certain maximum holding. Even if the cap is placed on two hectares, it would benefit 87 per cent of agricultural households (as 67 per cent hold less than one hectares of land).
Pilot studies have been conducted on universal basic income in India. A pilot in eight Madhya Pradesh villages provided over 6,000 individuals a monthly payment. The results were intriguing. Most villagers used the money on household improvements.
Thus, a regular unconditional basic income, scaled up through pilots, and rolled out slowly and carefully, seems ideal for India.