`The cri­sis has been there for long'

Down to Earth - - COVER STORY -

Economist C P Chan­drasekhar teaches at Jawa­har­lal Nehru Univer­sity, New Delhi, and has au­thored sev­eral books on eco­nomic re­forms. He speaks to Down To Earth on pre­vail­ing agrar­ian cri­sis

How do you in­ter­pret the re­cent dip in ru­ral wage and slump in con­sump­tion in ru­ral ar­eas? These are symp­toms of an agrar­ian cri­sis. While some of the trends are re­cent, the cri­sis has been there for long. How­ever, it could not be felt for some time be­cause of con­sec­u­tive good or nor­mal mon­soons. Un­der­ly­ing the cri­sis are grow­ing un­avail­abil­ity of crops, the col­lapse of public in­vest­ment and low­er­ing ex­pen­di­ture in ru­ral In­dia, and the turn to un­sus­tain­able prac­tices of depend­ing on farm loans.

This has oc­curred in an en­vi­ron­ment of lib­er­al­i­sa­tion in which global trends and fluc­tu­a­tions have in­flu­enced do­mes­tic prices and the pat­tern of do­mes­tic pro­duc­tion. The con­se­quence has been a com­bi­na­tion of in­creased volatil­ity in pro­duc­tion and ris­ing ru­ral in­debt­ed­ness, which in­crease vul­ner­a­bil­ity.

As a coun­try, do we have the re­silience to tide over con­sec­u­tive crop losses? Any shock that im­pacts pro­duc­tion by con­strict­ing rev­enues earned by an al- ready in­debted and cash-strapped peas­antry threat­ens a col­lapse into bank­ruptcy. This spells dis­as­ter in an en­vi­ron­ment where so­cial pro­tec­tion is min­i­mal or en­tirely ab­sent. More­over, with state pol­icy in­creas­ingly bi­ased in favour of cor­po­rate and the gov­ern­ment fi­nanc­ing that shift by cut­ting ru­ral de­vel­op­ment and so­cial ex­pen­di­tures, the pro­tec­tion that the state had ear­lier of­fered in times of cri­sis has vir­tu­ally dis­ap­peared. There is lit­tle space for re­silience here.

Is ris­ing ru­ral debt a sys­temic prob­lem or just part of a long phase of tran­si­tion? If ru­ral in­debt­ed­ness in­creases at a time when the vi­a­bil­ity of crop pro­duc­tion is un­der threat, the tra­jec­tory is un­sus­tain­able and the prob­lem sys­temic. This is no process of "liveli­hood tran­si­tion", though the peas­ant un­rest it may pre­cip­i­tate could make it the trig­ger for pol­icy tran­si­tion or even struc­tural trans­for­ma­tion.

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