Enough with the lofty rhetoric. It’s time to let the money do the talk -Himanshu

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published Published on May 15, 2020   modified Modified on May 17, 2020


Slogans, vision statements and acronyms are unlikely to be of any help to those in distress

As the details of the mega fiscal package of 20 trillion announced by the prime minister are slowly being revealed by the finance minister (FM), it is increasingly becoming clear that it has less to do with the immediate crisis of lives and livelihood and more to do with the long-term agenda of reforms and development. The third instalment focused on the agriculture and allied sector was no different, with a lot of promises and budgetary support for agriculture, although with no expiry date. Most of the reforms were also those which have been in discussion for decades without much progress, although repeated every year in budget speeches.

But this was not a budget speech and certainly not an election speech outlining the vision for the agricultural sector. It is clear that the stimulus is in the midst of a large and expanding humanitarian crisis of hunger, starvation and poverty driven by declining incomes. Therefore, what is of utmost importance is the need to provide incomes and food to the poor, migrants and majority of the workers engaged in the agricultural sector. As the FM pointed out, the lockdown has led to a sharp decline in demand for agricultural commodities, particularly perishable commodities. Unable to sell due to supply chain disruptions, most farmers had to resort to distress sale or destroying their produce. The decline in demand for milk was pointed out by FM but the same is true of a range of other agricultural commodities.

The other set of agricultural commodities such as sugarcane, maize and soybean have already seen a sharp collapse of prices following demand collapse and decline in international prices following collapse in petroleum prices. Other than wheat harvest which has seen public procurement, most of other crops have seen a sharp drop in farm gate prices. And it has not happened because of lack of reforms but because of the decline in demand due to the slowdown in the economy followed by the aggressive lockdown which disrupted demand as well as supply chains.

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Livemint.com, 15 May, 2020, https://www.livemint.com/opinion/columns/enough-with-the-lofty-rhetoric-it-s-time-to-let-the-money-do-the-talk-11589564599350.html

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