Skip to main content

Why Govt of India's farm bills may 'benefit' industrial Gujarat at the cost of Punjab

By Shantanu Basu*

The Dedicated Freight Corridor was sanctioned by the Union Cabinet under Manmohan Singh in 2006. It comprised of two corridors, one each on the west and the east. While the western corridor terminates at Jawaharlal Nehru Port (JNPT), the eastern one ends in Kolkata's suburbs, about 118 km from Haldia and about 40 km from Kolkata port.
The western corridor covers Punjab and Haryana, transits through Rajasthan, enters Gujarat and ends in Navi Mumbai. The maximum number of important junctions on this corridor lie in Gujarat, viz. Mehsana, Valsad, Palanpur, Surat and Vadodara. Of these, the major junctions in Haryana and Rajasthan are not major factory clusters. However, most of the ones in Gujarat are.
What is interesting is the fact that the opening of the farm sector via three controversial Farm Bills affects Punjab the most that produces 12% of India's cereals and some part of fruits. With its minimum support price (MSP)-dependent agriculture being opened, it makes good business sense to source bulk unprocessed agri-produce from Punjab, process and repack them for export from ports on the western seaboard. The logical corollary would be that profits would accrue to Gujarat-based businesses, far more than Punjab's farmers.
Conversely, Gujarat-based food processing units would develop a vested interest in Punjab's produce, not much of which may be at remunerative prices for Punjab's farmers. That may be a major hidden reason for vociferous opposition from Punjab on the three farm acts. In effect, Gujarat would be winner all the way since the Dedicated Freight Corridor Corporation (DFCC) will make it relatively cheap to source bulk raw material from Punjab for export, either as unfinished or processed food.
That could potentially lead to agricultural land in Punjab being diverted to non-agricultural purposes or to more lucrative horti/floriculture, evacuating both of which can be done by small aircraft operating from grass fields on Punjab's farms to international hubs in Chandigarh, Amritsar, Delhi or Mumbai, bypassing Gujarat and other states en route.
Falling global aviation fuel prices will add to lower air freight, particularly for horti/florculture produce. Moreover, smaller farmers can always double as contractors for bigger farms by pooling their land for captive orders. However, that may have deleterious effects on the production of cereals in that state and bring about fundamental change in the farming regime.
Likewise, the eastern corridor traverses the mineral belt of northern and eastern India. India's export profile in normal years usually is skewed to exporting raw materials and then importing finished materials from the same countries of export. For decades, Kudremukh and Jindal Vijayanagar Steel Ltd (JVSL) have survived on converting iron ore from Bailadila and Goa, refining it and exporting it to Japan.
Ironically, JVSL then imported iron pellets and bars from Japan for processing as finished steel. And eastern India is rich in minerals. For states from where this ore is extracted royalties, if any, are computed on the value of the finished product. However, the same state gets nothing when the same ores are imported as intermediaries. Where is the fairness and equity for these states?
While it is true that the Indian Railways’ (IR's) existing freight lines are overloaded, DFCC is principally a life saver. However, the route both these corridors traverse are also home to India's granaries and minerals. 
There is already huge corruption in the mines sector. Once these corridors are completed in another two to three years, India could potentially be looking at unsustainable extraction of its mineral and agricultural resources, where processing them overseas reap the optimum profits. Indian miners and farmers will remain indigent. Likewise, the public exchequer will not gain much since GDP accretion and resultant taxes will be computed on unfinished produce.
In fine, DFCC is a win-win for the rulers of this land. For them to offer cheap raw feed stock to overseas processors is but feeding the third industrial revolution. One can only guess the cash flow into party and personal coffers once these corridors become fully operational. After all, export and import licenses are good business for many. And the aam aadmi (common man) will be made to believe that exports are great news for a country. 
---
*Former senior official of the Comptroller and Auditor General of India (CAG). Source: Author’s Facebook timeline

Comments

Anonymous said…
WOw, what a pessimist view? so should we stop the Dedicated freight corridor?

TRENDING

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

Attack on Gaza: Western media 'went out of the way' to obscure, protect perpetrators

By Sonali Kolhatkar*  Israeli forces killed more than a hundred Palestinians and wounded more than 700 on February 29, 2024 during a distribution of food aid in Gaza city, pushing the Palestinian death toll to 30,000 since October 7, 2023. The food aid massacre was straightforward in its deadliness as armed Israeli forces aimed weapons at desperate, hungry Palestinian civilians and killed many of them. It was also plausible within the context of who has firepower and who doesn’t, and wholly consistent with Israeli atrocities, especially those committed since October 7, 2023.

Living standards in 'model' Gujarat worse than major states: Govt of India document

By Rajiv Shah  Amidst raging controversy over whether the latest Government of India’s “Household Consumption Expenditure Survey 2022-23 Fact Sheet: August 2022-July 2023” suggests that India’s poverty levels are actually down to 4.5 to 5%  during the decade-long Narendra Modi rule, a state-wise breakup in the 27-page document shows that “model” Gujarat’s average consumption expenditure is far below most of the so-called developed states.

India second best place to invest, next to UAE, yet there is 'lacks support' for IT services

By Sreevas Sahasranamam, Aileen Ionescu-Somers*  The United Arab Emirates (UAE) is the best place in the world to start a new business, according to the latest annual Global Entrepreneurship Monitor (GEM) survey. The Arab nation is number one for the third year in a row thanks to a big push by the government into cutting-edge technology in its efforts to diversify away from oil.

Not livable in summer, Chitrakut PM-Awas houses 'push' tribals in moneylender trap

By Bharat Dogra*  Those who are in-charge of implementing the PM-Awas scheme of rural housing can rightly take pride in what has been achieved in Dafai hamlet (Karvi block, Chitrakut district, Uttar Pradesh). All the Kol tribal families here are extremely poor and vulnerable. In a rare achievement, almost all of them have received housing assistance under PM Awas. 

Stressing on standardisation, efficiency, capitalists 'intensify' workers' exploitation

By Bhabani Shankar Nayak*  The productivist ideology lies at the core of the profit-making pyramid of capitalism. It perpetuates a relentless cycle characterized by busy schedules, workplace tension, an imbalance in work-life equilibrium, and a pervasive sense of alienation. 

Development? This tribal hamlet in Chitrakut has no toilets, no electricity connections yet

By Bharat Dogra*  As we moved away from the starting point of the Bundelkhand Expressway and a famous pilgrimage site into a side-road, the hills of Chitrakut here appeared to be more and more isolated. Another turn, and we appeared to have reached almost a dead-end. However it is here that over 80 households of the Kol tribal community have been living for a long time.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

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".

WTO 'loses legitimacy': CSOs shut out of normal participation in MC13 at Abu Dhabi

By Deborah James  Given unprecedented repression of participants, the 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) at Abu Dhabi should not continue until historical and international standards and human rights for participation in global governance are restored.