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Predictions of negative growth existed even earlier, why blame pandemic? Top academic

Counterview Desk

In his keynote address, “Blearing the Rural: A Macro Picture of Rural Development”, at a webinar organized by the Centre for work and Welfare at Impact and Policy Research Institute (IMPRI), New Delhi, RS Deshpande, honorary visiting professor at the Institute for Social and Economic Change (ISEC), Bangalore, has regretted that urbanism has become synonym for development, one reason why people in rural areas migrate to “the shining life of urban”.
Prof Deshpande said in his lecture, transcribed by Dr Arjun Kumar and Dr Nitin Tagade, that even before Covid-19 pandemic, the economy of India was in a downward spiral, and institutions such as Reserve Bank of India (RBI) had projected negative growth rates. But, we hoped that injections of investments would boost the economy. But now it is Covid-19 to blame for the continuing downward spiral!
Others who spoke at the webinar included Professor DN Reddy, former dean, School of Social Sciences, University of Hyderabad, who said that agriculture has been seen as the silver lining in the whole pandemic, which is being taken very lightly by the government; and Dr Arjun Kumar, director, IMPRI, who stated that the pandemic has brought back our conscience towards the fundamental and resilient engine of Indian growth story -- agriculture and rural economy.

Excerpts from Prof Deshpande’s lecture:

A major chunk of people (127 million) in rural India is heavily dependent on agriculture for their livelihood of which 82% are small and marginal farmers, and 107 million are agricultural labourers. Despite being the top producers of commodities like wheat, rice, sugarcane etc, India is not self-reliant. Even if we compare growth rate of food grain production with growth rate of only adult population then also self-sufficiency is a distant dream.
The per capita availability of food grains stands at 401gms per person per day which is less than minimum international standard of 500gms per person per day. The factors hindering food security are road density, ration cards, gender related indicators, consumer price index, dependency ratio etc.
The Lewis Framework is wrongly applied in India’s migration scenario as migration out of agriculture is being compensated by the service sector instead of the manufacturing sector. The decreasing rate of agriculture share in GDP is not the same as the decreasing rate of the workforce in the agriculture implying that the carrying capacity of agricultural land in rural areas is increasing very fast with per 1000 hectares.
Though the policies have always been focusing on the development of the industrial sector from 1951 onwards, still we have not achieved the desired growth. India had major revolutions in 1967-68 and 1989-90. Agriculture has always been at 3% growth rate for 60 years except during some intermittent periods. Though productivity is increasing, has the country contributed sufficient efforts and attention to the agricultural sector’s growth?
Since the 1960s elasticity of availability of net food grains with respect to income has been far lower than one. This is conceptualised as Arithmetic Availability under which per person per day availability of food grains is increasing but steadily because of the possible reasons of diversified diet including fruits and vegetables, mutton, chicken etc. At the aggregate level arithmetic availability cannot be lowered.
As for the problems faced by the poor such as malnutrition, wasting, stunting of the children, lack of accessibility to food grains is due to the low purchasing power capacity of individuals. The market is tainted with corruption in food markets and the public distribution system. India is home to the largest poverty and undernourished population in the world despite having resources and availability of grains. The nine Indian states having poverty density higher than the Indian average are Assam, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Manipur, Mizoram, Odisha, and Uttar Pradesh.
The Indian economy has faced economic retrogression. Before Covid-19 pandemic, the economy of India was in a downward spiral with falling GDP growth rates steadily. Even institutions such as Reserve Bank of India (RBI) projected negative growth rates of GDP. But, the country’s governance still hoped that injections of investments would boost the economy; but now it is Covid-19 to blame for the continuing downward spiral.

Impact of pandemic

Even after 70 years of planning and independence, the list of backward districts in the country made in the second plan is the same as one in the eleventh plan showing the namesake development. Now with the unexpected pandemic, the blame game is into force and no one really knows how long is it going to take now to recover from all the issues we are facing from the last 70 years which is now complemented with the uncertainties from Covid-19. 
Agriculture has been seen as the silver lining in the whole pandemic, which is being taken very lightly by the government
The number of problems posed by Covid-19 are: Shattering public health networks in rural areas as evident by the fact that 23% of the villages in India are without Public Healthcare Centres (PHC). Lack of preparedness with no oxygen masks, ventilators, PPE kits for doctors in rural areas is a hidden bomb. The average distance to PHC is about 48km.
The cities which boasted as having the best medical facilities collapsed under pressure. So, the analogy goes all around the thinly distributed rural India and thickly distributed urban India. The agricultural supply chains have collapsed leaving many people unemployed and this has increased dependence in rural areas. Severe unemployment which may lead to social distress, robberies and theft, and increased poverty would lead to more inequality.
During Covid-19, reverse migration due to unavailability of money, food is the outcome of casualization of the workforce where poverty has increased, inequality has increased. Estimated global loss is $5.8 to 8.8$ trillion in March, given by Asian development bank. One can sense that it can be anywhere near 19% now.
There’s a need to redefine economic contours. Following are suggestions for solution which can bring back the rural economy on track:
  • Employment schemes need to be properly implemented across regions to reduce unemployment
  • Primacy of agricultural sector needs to bring back, 
  • Returned migrant labourers must be settled in their original jobs, 
  • There should be an increase in public investment in infrastructure in rural India, 
  • There is a strong need for rural industrialization which will help employing rural people without migrating them far off, 
  • Institutionalizing Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) so that they will be the sole supplier of labourers for infrastructure projects and wages will be fixed by operators under MGNREGS. 

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