Put cash in the hands of people and businesses
Prime Minister (PM) Narendra Modi has included long-awaited policy decisions in his economic stimulus package to get growth back on track. It has been in the doldrums thanks to the coronavirus disease (Covid-19) lockdown. But these are long-term decisions with no direct connection to the current crisis. So why have they been included in the package? Is it because the PM is using this crisis as an excuse to push through policies that have faced resistance? Perhaps he is taking a cue from former prime minister, Narasimha Rao, who used the economic crisis of 1991 as an excuse to unscramble the licence-permit raj.
The Covid-19 package promises to amend the restrictive Essential Commodities Act, 1955, to allow farmers to sell their produce anywhere in the country, and to provide legally enforceable contracts enabling them to sell directly to food processors and other customers. Farmers not being paid remunerative prices for their produce has long been a problem. Nearly 20 years ago, academics at the University of Agricultural Sciences, Dharwad, told me all their research efforts had gone into increasing production and that marketing had been ignored. One scientist said, “ Farmers come to us and say ‘we did everything you told us to produce crops and now tell us where to sell them’.” The problem of marketing was created by the restrictions that Modi is now committed to removing. But attempts to overhaul agricultural marketing have been thwarted by the states that don’t want to lose their control over agriculture and the politically influential middle ...
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