Skip to main content

Rural wage growth down from 8.4% under UPA to 0.2% under NDA, farmers now not getting support price: Crisil

By Rajiv Shah
Even as regretting that investment in India is failing to pick up, in its latest report on four years of Prime Minister Narendra Modi's government, Crisil, India's leading rating agency, has lamented that things have been worse for the country's rural sector, which, it has said, "has been riddled with challenges including slower agricultural growth, poor farm price realisation, slowdown in construction activity, and sluggish rural wage growth."
In fact, Crisil warns, "An unhappy hinterland can turn out to be the proverbial Achilles’ heel for any government during elections", asking the Modi government to take mitigating measures that may help improve the situation "in the short run, such as increase in minimum support price and price deficiency payment scheme", even as strengthening "the non-agriculture rural economy by front-loading infrastructure development and construction activities."
Noting that "sluggish growth in agriculture and non-agriculture rural wages during this period hurt incomes", Crisil said, "Sub-normal monsoon in fiscals 2014 and 2015, coupled with twin disruptions from the lingering impact of demonetisation (in fiscal 2017) and GST implementation glitches (in fiscal 2018) dampened rural wage growth between fiscals 2015 and 2018."
According to Crisil, "real agricultural wage growth" -- calculated by adjusting inflation -- grew on an average by 9.5% between fiscals 2010 and 2014, but slipped to 4.8% during fiscals 2015 and 2018. Things have been worse for non-agricultural real wage growth, it said. These "grew 4.8% on average during fiscals 2010 to 2014", but "by a sluggish 0.2% on average during fiscals 2015 and 2018."
Further pointing towards rural distress over the last four years, Crisil noted, "In fiscals 2015 and 2016, agricultural production fell due to poor rains, and when production picked up in the next two fiscals, collapse in agricultural prices hit farm incomes." Thus, "Real agriculture GDP growth, which averaged 4.3% from fiscals 2010 to 2014, declined to 2.4% on average during fiscals 2015 to 2018 despite witnessing record high production in fiscal 2017, followed by a bumper production in fiscal 2018."
Worse, said Crisil, even in nominal terms -- calculated without taking into account inflationary impact -- "the average agriculture GDP growth, at 7.7% between fiscals 2015 and 2018, was lower than the 15.4% growth during fiscals 2010 to 2014." Things only deteriorated in 2017-18, suggested the top rating agency: "The nominal GDP growth for fiscal 2018, at 4.2%, was the slowest in the last 13 years due to collapse of agricultural inflation."
Rural incomes went down also because the Government of India failed to provide minimum support price (MSP) to the farmers, suggested Crisil.
"Between fiscals 2010 and 2014, minimum support prices or MSPs (across crops for which these are announced) grew ~12% on average, while the period between fiscals 2015 and 2018 has seen an increase of only ~5%", it said, adding, "In 2017, of the 14 major crops (which account for 80% of the total area sown), eight crops, mostly pulses and oilseeds, were selling below MSP."
Pointing out that "construction has been a major employer of rural workforce", Crisil said, "The share of rural workforce in construction rose from 3% in fiscal 2000 to 11% in fiscal 2012 when it grew at 9% (average) per year in real terms", though regretting, "Most of the slowdown post fiscal 2015 was seen after demonetisation."
The construction sector, it said, "Slowed on average during fiscal 2015 to 2018 on account of the disruption from demonetisation", adding, "Real construction GDP growth, which averaged 5.2% over fiscals 2010 to 2014, moderated to 3.4% on average between fiscals 2015 and 2018."
Further noting that "the cash crunch following demonetisation reduced private consumption growth", Crisil said, "Within private consumption, rural consumption was particularly hit as farm realisations wilted during this period." It added, The fall in private consumption also reduced fresh investments in industry... Lower investments further reduced demand for manufactured products in the economy."

Comments

Praveen said…
Crisil must be accurate but this means bad time for NDA who face election. Even UPA opened the coffers for farmers in the last year of their rule but it far from helped upa in the election . Even if NDA does the same , they will find it difficult to convince the voters despite Modi’s appeal . Jaisi karni vaisi bharni. Good article !
Uma said…
It is surprising that the NDA has allowed such a big fall--surely they are aware of the consequences.

TRENDING

Ganga world's second most polluted river, Modi's Varanasi tops microplastics pollution

By Rajiv Shah  Will the new report by well-known elite NGO Toxics Link create a ripple in the powerful corridors of Delhi? Titled “Quantitative analysis of microplastics along River Ganga”, forwarded to Counterview, doesn’t just say that Ganga is the second most polluted river in the world, next only to Yangtze (China). It goes ahead to do a comparison of microplastics pollution in three cities shows Varanasi – the Lok Sabha constituency of Prime Minister Narendra Modi – is more polluted compared to Kanpur and Haridwar.

Madhya Pradesh tops India's 145 instances of 'anti-Christian atrocities' this year

Counterview Desk  A report prepared by the Religious Liberty Commission of the Evangelical Fellowship of India (EFI), founded in 1951 as the national alliance of evangelical Christians of the Protestant denomination, in its just-released report, “Hate and Targeted Violence against Christians in India: Half Yearly Report 2021”, has said that an analysis of 145 cases of violence it has documented against Christians, mainly by non-state actors, “stems from an environment of targeted hate.”

Demolition drive: Why aren't high-end hotels, farmhouses treated same way as Khorigaon?

By Our Representative A public hearing, sponsored by the civil rights group National Alliance of People’s Movements (NAPM) to hear the affected citizens of Khorigaon, off Faridabad, Delhi NCR, has seen local people complaining how their houses are being demolished even as the entire area was converted into a prison through heavy police deployment.

How real is Mamata challenge to Modi? Preparing for 2024 'khela hobey' moment

By Prof Ujjwal K Chowdhury*  Third time elected West Bengal Chief Minister, Mamata Banerjee is on a whirlwind tour of Delhi, meeting everyone who matters within and beyond the government, the Prime Minister, the President, some Cabinet ministers, Sonia and Rahul Gandhi, several other opposition leaders, et al.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

How BSF, police, court turned Bangladeshi woman slave victim into accused in crime

Counterview Desk  Civil rights leader Kirity Roy has strongly objected to the manner in which the Border Security Force (BSF) , the police and the judiciary in West Bengal have treated a 35 years old Bangladeshi woman victim of human trafficking, who was subjected to sexual exploitation for 15 long years, has been declared guilty of violating the Foreigners Act, violating all human rights norms.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Khorigaon demolition: People being 'brutally' evicted, cops 'restricting' food, water

By Ishita Chatterjee, Neelesh Kumar, Manju Menon, Vimal Bhai* On July 23, the Faridabad Municipal Corporation told the Supreme Court that they have cleared 74 acres out of 150 acres. Despite the affidavit of the Municipal Corporation, the court, on the complaint of various litigants, that the arrangements for living, food etc. have not been made for the people. 

Covid impact on menstrual cycles? Young girls 'relapsing' back to unhygienic old-cloth rags

By Dr Sudeshna Roy*  Covid-19 pandemic has gripped the world in health and economic shock. Combating this public health crisis has diverted development resources earmarked for adolescents and the youth. India; having world’s second largest population; 1.38 crores as per UN mid-year 2020 estimation, also shelters the largest adolescents and young adult population, which at 243 million constitute 20% of the world’s 1.2 billion adolescent population.

Project launched to fight high malnutrition in Odisha's backward Malkangiri district

By Our Representative Odisha civil rights groups have launched a new project, which will cover 8,000 households under of Podia block in Odisha’s Malkangiri district in order to provide essential preventive medicine to the community through the trained village-based Swasthya Sathis (health workers) and fight malnutrition in the district’s rural areas.