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The weakest link Among the Modi government’s many hits was one crucial miss — agriculture. India’s reforms started with stealth, and started from the top. It benefited those better off more. Poverty halved, but it took 18 years, compared to just six years in China. Written by Ashok Gulati | Published on:May 25, 2015 12:00 am The programme could be a game changer if combined with Aadhaar and mobiles (JAM), and if most subsidies are directly transferred to the accounts of beneficiaries, as already done in the case of the gas subsidy. Three recently launched schemes— the Pradhan Mantri Suraksha Bima Yojana, the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Atal Pension Yojana — could together be a major leap in strengthening social security of the masses in the unorganised sector. There must, of course, be many other hits, especially in socio- political mobilisations like the Swachh Bharat Abhiyan and in the BJP ’s membership crossing 10 crore. But let us focus on the economy here. What is the Modi sarkar’s biggest miss? It is agriculture and increasing farmer distress. There have been two bad seasons, and if the third also goes out of gear, the Modi sarkar may be in for trouble. Raising insurance compensation without putting the insurance system on a strong footing is not going to help much. Neither will soil health cards, if the current system of subsidies is not rationalised. While Modi made significant strides during his visit to China, landing 26 business deals worth $22 billion, none of of these was related to agriculture. But the biggest lesson that the Modi sarkar could learn from the China visit lies in agriculture. China produces more than 600 million tonnes of foodgrain, compared to India’s 251 million tonnes in FY2015, from a cropped area that is

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Views on Modi Government's agriculture policy

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The weakest linkAmong the Modi governments many hits was one crucial miss agriculture.Indias reforms started with stealth, and started from the top. It benefited those better off more. Poverty halved, but it took 18 years, compared to just six years in China.Written byAshok Gulati|Published on:May 25, 2015 12:00 amThe programme could be a game changer if combined with Aadhaar and mobiles (JAM), and if most subsidies are directly transferred to the accounts of beneficiaries, as already done in the case of the gas subsidy. Three recently launched schemes the Pradhan Mantri Suraksha Bima Yojana, the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Atal Pension Yojana could together be a major leap in strengthening social security of the masses in the unorganised sector.There must, of course, be many other hits, especially in socio-political mobilisations like theSwachh BharatAbhiyan and in theBJPs membership crossing 10 crore. But let us focus on the economy here.What is the Modi sarkars biggest miss? It is agriculture and increasing farmer distress. There have been two bad seasons, and if the third also goes out of gear, the Modi sarkar may be in for trouble. Raising insurance compensation without putting the insurance system on a strong footing is not going to help much. Neither will soil health cards, if the current system of subsidies is not rationalised.While Modi made significant strides during his visit to China, landing 26 business deals worth $22 billion, none of of these was related to agriculture. But the biggest lesson that the Modi sarkar could learn from the China visit lies in agriculture. China produces more than 600 million tonnes of foodgrain, compared to Indias 251 million tonnes in FY2015, from a cropped area that is less than Indias and with a holding size that is almost half of Indias (1.15 hectares).Moreover, it is important for Indian policymakers to know that China started its economic reforms with agriculture, not industry. During 1978-84, the period which marks the beginning of Chinas economic reforms, the country abandoned the commune system and graduated to the household responsibility system in land. This is well known. What is not known widely is that China also liberated controls on agriculture pricing to a large extent. As a result, its agriculture grew by 7.1 per cent per annum, while farm incomes increased by 14 per cent per annually, and rural poverty halved in the six years between 78 and 84.It is this firing from the bottom, or starting with agriculture, that gave political legitimacy to economic reforms in China, as it benefited the largest number of people. This unprecedented rise in rural incomes also created huge demand for simple industrial products, ranging from televisions and toys to refrigerators. And this opportunity was grabbed by town and village enterprises, which led to the manufacturingrevolution in China. The rest is history.Indias reforms started with stealth, and started from the top, correcting exchange rates and industrial licensing etc. It benefited those better off more. Poverty halved, but it took 18 years (1993-2011), compared to just six years in China, as India had to rely on the trickle-down effect.Investment in agriculture, especially irrigation, research and development in thissector, and one common all-India market, are critical. These will have high payoffs, politically and economically. Remember, the threeBJPchief ministers who came back to power three times in a row (in Gujarat, Madhya Pradesh and Chhattisgarh) all headed states where agricultural GDP grew at more than 7 per cent per annum over a decade, that is, from 2001-02 to 2011-12. Nobody knows this better than Modi himself, as he has harvested the biggest political crop from it. If only he would now focus on this weakest link, and make sure that Indias growth story is put on a sustainable trajectory.The writer is Infosys chair professor for agriculture at Icrier.