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MSP Hike Which Was Hailed As “Historic” Means The Whole Government Claimed A Big Sham.

Nothing is apt for government's attitude except describing it as jumla.

The recent hike in minimum support price (MSP) for selected crops gave another opportunity for the ruling Bharatiya Janata Party (BJP) to flaunt its so-called pro-farmer orientation. For any serious political observer, it is clear that behind this decision lies a huge public relations exercise. Before calling the Cabinet Committee Economic Affairs (CCEA) meeting, Prime Minister Narendra Modi engaged directly with the farming community over teleconferences, wherein he apparently spoke to carefully selected good farmers who were assembled before teleconference sets. From each state, it was told that the feedback on NDA-2’s agrarian policies is good and farmers are able to invest farm surpluses in several activities aimed at augmenting the farm infrastructure.

After two weeks in a meeting in Delhi, PM announced the four-pronged strategy to enhance farmers’ income. Then came the announcement of MSP which was hailed as historic. This means the whole government claimed a big sham. Had the situation of the farmers been so good as it was projected through the animated teleconference, then there would have been no need for the BJP government to come under pressure for its mishandling of the agrarian sector. Nothing is apt for government’s attitude except describing it as jumla.

The CCEA finally took up the matter and announced MSP, only after kisan, agricultural workers and organizations representing industrial workers gave an ultimatum and threatened for a protest in Delhi on September 5, 2018. In real time, the Twitter handle of PM Modi claimed that CCEA’s decision was historic and also applauded the BJP government for implementing its electoral promise of ensuring farmers a return of cost + 50 %. While addressing a press conference, Union Home Minister Rajnath Singh told the nation that this decision will impose only about Rs.15000 crores burden on the exchequer.

Economists and farmers association’s reaction is not uniform. Most of the activists criticized the government for not honoring their demand of calculating the agricultural costs on C2 formula basis. The pink papers extrapolated the cost of increase in MSP over the economy at large and RBI also indicated its stand that such decision would reduce the possibility of interest rate reduction.

Media’s euphoria on MSP rise brings forth certain important issues for consideration. Firstly, whether this is the ever historic raise of MSP as per year-on-year basis. Secondly, if ensuring cost + 50% returns on farm produce leads to impose a burden of mere Rs.15000 crores on the exchequer, then why did the BJP wait for four years to do so? Is our economy under Modi’s regime so fragile that it cannot survive with a burden of merely Rs.15000 crores? Thirdly, if this is what the BJP terms as implementing the electoral promise, then what would be the status of its submission to the Supreme Court wherein it stated that such costs formula would lead to inflation and hence not advisable. Finally under which dispensations did the farmers benefit the most?

Now, it is definitely not a historic step as termed by the BJP government. If we confine our analysis to paddy which is the key farm produce both in terms of acreage and food security, then according to the figures culled out from RBI’s official website, the year-on-year growth of MSP for paddy was greater in the last seven years. The increase varied between 28.4% to 12.2% whereas this year’s increase over the last year is 12.9%. On the top of that, the table below clearly establishes the fact that the farming community benefited the most only under non-BJP, non-Congress regimes.

The data presented on the RBI website indicating the year-on-year increase in MSP for paddy from 1989 to 2018, for three decades.

Looking at the relevant year wise data and contextualization drives the point home clearly. The table divides the last three decades on the basis of the regimes that held power during that time and the average growth is arrived by calculating the figures officially available on RBI website. This makes it clear that the highest increase in MSP for paddy, was during the National Front government at 13.2%. The average growth rate under Congress government headed by late PV Narasimharam stands below that of National Front government’s. The figures suggest that the worst ever average growth increase of MSP for paddy was under the NDA-1 regime, between 1999-2004 and as it is evident, the NDA-2 under Modi’s rule is following the same path. Again UPA-1 government was able to give it a leg up to nearly 11% and by UPA-2 tenure, it came down to 8%. This analysis surely drives one key point: having non-Congress and non-BJP parties in power at the centre is a reaping time for farmers.

Thus, the hype over the historic hike in MSP is unfound and only aimed at diverting the public attention. PM Modi and BJP need to clarify why it took four years to bail out farmers and controlling farmers’ suicides if the burden was merely Rs.15000 crores. This itself makes it clear that the so-called MSP estimates are nothing but jugadoo figures to bail out BJP in the next round of assembly elections taking place in Madhya Pradesh, Rajasthan and Chattisgarh.

The forthcoming elections in these states is a life and death battle for BJP, not only for the reason that its stakes are higher than any other party but also for the fact that its results will play a crucial role in the next general elections. That is why though the CACP submitted its report way back in March this year, the government wanted to wait till now to declare the MSP, so that its positive impacts can be remembered just before the elections in Chattisgarh, Rajasthan and Madhya Pradesh.

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