Pick any crop, check its price and compare it with what was the rate the previous year. Chances are the prices have fallen. In some cases, the fall has been quite sharp and in many cases moderate to substantial.
An analysis by me in April last year showed that the fall was across the board and for almost all agri commodities. To check whether that trend persists or not, I picked one item – potato – and compared its wholesale price in December to what the price was a year ago. The fall has been a staggering 48 per cent in Maharashtra, 35 per cent in Delhi, 41 per cent in Punjab, 26 per cent in Uttar Pradesh and 45 per cent in West Bengal.
This is good news for consumers. But even as the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) programme completed ten years since its implementation on February 2, think of the plight of the farmers who produce those commodities. With their source of income drying up following three consecutive years of deficient monsoon, crashing prices have added to their woes.
They can hardly employ daily wage workers to work in farms. Rural wage growth, as a result, has collapsed. And areas where there is marginal uptick, the increase is substantially lower than the average inflation of 5-6 per cent. Either there are no jobs or they fetch income significantly less than earlier, eroding the purchasing power of a large section of the rural population.
Casual Workers Hard Hit
We are talking about a large pool of casual workers in the country. According to the government’s Socio-Economic Caste census, a majority of people (at least 51 per cent) in rural area are casual workers. And in some states (Bihar 71 per cent, West Bengal 58 per cent, Odisha 59 per cent, Andhra Pradesh 59 per cent and Tamil Nadu 65 per cent) the proportion is much higher.
This is the pool of casual workers which is to be targeted by the MNREGA. And precisely in acute rural distress as the situation we are witnessing for quite some time now. But what we got instead was constant neglect of the flagship scheme in the last two years.
The total number of households that completed 100 days of paid jobs fell from nearly 52 lakhs in 2012-13 to little under 25 lakhs in 2014-15. It amounts to a reduction of more than 50 per cent in two years! It was only after huge demand from the ground that more money was allocated for the scheme since August last year.
In fact, 35 per cent more jobs were provided under the scheme in August last year compared to the same month in 2014.
Governmental Indifference
Absolute indifference to the rural job scheme is believed to have contributed somewhat to the acute stress in the rural economy. Tractor sales, one of the indicators of how rural economy is performing, fell the sharpest since 2003 in the first half of 2015-16. The sale of motorcycles too fell in excess of four per cent in the same period.
Why was this scheme given such a step motherly treatment in the last few years? It is hard to understand given the positive impact it has had in the countryside. The scheme is estimated to have prevented nearly 14 million people from falling below the poverty line. And it is believed to have contributed a great deal to accelerated reduction in the number of people below poverty line since 2004-05.
Scholars have also pointed out that the scheme, where implemented well, has created tangible assets as well. There are reports of how MNREGA led to afforestation in some areas, created minor irrigation assets in some other and recharged defunct borewells in yet other places.
Transformational Impact
Imagine the transformational impact the scheme can have in the countryside. With an active pool of nearly 10 crore workers, more than 5 crore of them with Aadhaar-linked bank accounts, the scheme, if used with some ingenuity, has the potential to make rural areas the real growth engine.
It can work as some sort of insurance for workers when the going gets really tough and should be viewed as such. It needs better implementation. Any thought of junking it must be junked forthwith. Thankfully, the current leadership, though derisive in its initial days of coming to power, has begun to realise the importance of the scheme.
(The writer contributes regularly to the Business Standard)