Photo Caption: File picture of Jat Agitation/AFP
Photo Caption: File picture of Jat Agitation/AFP

From Jat agitation to Patidaar agitation, to Maratha agitation, this is not just about reservation. It goes beyond reservation, as rural India is in distress and needs urgent relief.

Jat reservation protests in Haryana, Patidar protests in Gujarat, Maratha protests in Maharashtra and the farmer’s unrest in Madhya Pradesh, all happened in the recent past. If one were to go by the media headlines and the general perceptions, these issues seem to pertain mostly to demands for reservation. However, there is a feeling that the country is missing the fundamental issues behind these recurring protests across various states.

The real issue seems to be that farmers are in distress and the rural youth is facing high level of unemployment. These protests are organised in the name of reservation but in reality it is a manifestation of the anger of rural India particularly due to unemployed rural youth.

Farmers in a ‘Catch 22’ situation  

From my personal interaction with scores of farmers, I can sense the distress of farmers. If crop production goes up, the rates drop and ultimately the farmer does not get good value. Conversely, if the production is low, there is shortage in the market and the rates of the concerned commodities shoots up. However, since the farmer is not having enough produce, again farmers get no value.

Finally when the farmer decides ‘Enough is Enough’ and he should get away from farming and try to venture into any kind of self-entrepreneurship, the doors of banks are mostly closed. Banks have some very impractical and illogical conditions. For instance, often banks insist on a CLU from the concerned State authorities. However, since most of agriculture land falls under de-controlled area, the concerned Town and Country Planning Department refuses to issue CLU. Agricultural land is often not considered to be a bankable mortgage by the banks. This means that only a wealthy farmer can possibly shift away from agriculture to some other more productive sector of economy.

On account of a severe mismatch between what is being spoken and visualised at the top and the actual implementation at the bottom, we have forced our farmers into a ‘Catch 22’ situation where neither have we allowed farming to be a profitable venture nor do we allow the farmer to diversify into areas other than farming.

Reverse migration: Need of the hour

The benefits that will arise out of stopping of migration of rural population to cities and metros will far outweigh the cost involved in giving these benefits to the rural India. The huge saving in transportation cost and social cost arising out of reduced tension resulting from availability of quality education, quality health and suitable employment opportunities in rural India will automatically turn urban habitats into smart cities as soon as the pressure of continuous migration goes off from these cities

Arranging finances

Of course, the next question shall be how to arrange finances for such a large farmer’s populace. At this stage, the only suggestion that can be made is that if the economy can sustain a 7 percent plus growth despite of NPA’s in banks exceeding Rs 6 lakh crore, it can very well afford a big shake up in our MSP system so that the farmers are assured of a minimum standard of living, employment and education.

I am worried that if immediate relief is not provided to rural India in terms of making farming productive and incentivising quality education in schools, the recurring protests in one form of the other may intensify in the times to come and may not augur well for the overall welfare of the society.

 Suggestions for measures to improve farmer’s income level

(The author shares the suggestion based on her interaction with the farmers.)

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Universal coverage of MSP

Bring all the crops, fruits, vegetables etc. under a Minimum Support Price (MSP) regime. This will allow MSP regime to cover 100 per cent of farmers instead of the existing 10 per cent farmers.

 Decent MSP levels

Devise MSP in a manner that the farmer gets at least 50 per cent return over his cost. The cost should include the labour cost of the farmer and his family.

Immediate relief through MSP

Announce 25 per cent hike in MSP in pulses, wheat, paddy and other existing crops for each of the next four years till the prices allowed as MSP are at least double the existing cost.

Facilitating setting up of new projects / industries in rural India

The present mind-set that agricultural land with high productivity should not be diverted for industries and other project needs to be changed. Agricultural land must be given the same treatment as any other piece of land wherein market should decide as to what the residents of that area should do.  It is an irony that in the name of preserving our productive agricultural land, we have constrained our farmer into only one sector of economy leaving him with little choice. The result that we see today is that even in the most fertile rural areas of Haryana, the net return on capital employed in the agriculture sector is 2 per cent (for instance average cost of land today is a minimum of Rs. 25 lakh per acre but the net return in one year on this piece of land even in respect of MSP crops such as paddy and wheat is hardly Rs. 50,000).

This compares very un favorable with any other sector of the economy (for instance Service sector gives a return on equity broadly in the range of 15 per cent to 60 per cent, Manufacturing sector in the range of 12 per cent to 30 per cent and Trading sector in the range of 6 per cent to 60 per cent).  It is, therefore, a setback for a hard working farmer where neither we allow him to have

This compares very un favorable with any other sector of the economy (for instance Service sector gives a return on equity broadly in the range of 15 per cent to 60 per cent, Manufacturing sector in the range of 12 per cent to 30 per cent and Trading sector in the range of 6 per cent to 60 per cent).  It is, therefore, a setback for a hard working farmer where neither we allow him to have

It is, therefore, a setback for a hard working farmer where neither we allow him to have higher return on equity and nor allow him to use his agriculture land for more productive purposes.  It is, therefore, suggested that the rural areas in the country should be thrown open for opening up new industries or service related works.  The Panchayats of the concerned villages may, however, impose reasonable restrictions (if at all required) after consulting their respective Gram Sabhas.

Removal of CLU approval requirement

A large number of areas in the rural India are deprived of very good business opportunities on account of complex CLU provisions which the farmers in the area are unable to satisfy.  It can be, therefore, proposed that for a limited period of 5 years starting from 2018, the entire area under the jurisdiction of village panchayats should be declared as decontrolled area that will not require CLU approval or levy of CLU fees.

These twin steps of facilitating setting up of new projects and removal of CLU requirement shall radically alter the landscape of rural India and present immense business opportunities for our farmers who have, so far, been kept relegated only to agriculture which has been one of the biggest factors for the widespread poverty and lack of development in rural India.  Setting up of new projects / industries in rural India without the limiting factor of CLU will open new frontiers / vistas of job creation and employment opportunities for rural youth who, at present, have no option but to migrate to cities and metros in search of employment and search of quality education.

Ease of Doing Business (EoDB)

The Government has shown a very positive intent for facilitating ease of doing business.  While the intent is good, the implementation under the district administration of different State Governments has not been very encouraging.  The World Bank Ranking 2017 that put India at No.131 amply substantiates this.

It is suggested that there is an urgent need of a paradigm shift regarding the procedures to be followed for setting up a project in rural India.

Rural entrepreneur should be allowed to set up a project of his choice on the basis of his declarations of having complied with regulated requirements.  Post setting up of the project, the concerned regulatory authorities would be entitled to inspect the projects for compliance only 24 months after setting up of the project.  This will give suitable breathing space for the emerging entrepreneurs and he shall not be discouraged due to umpteen number of approval processes that have been prescribed in the present regulatory environment.  The idea should be to facilitate an entrepreneur for setting up a project and not to stop it / put obstacles when the project itself is in infancy.

Easy availability of credit for rural India

While the slogan of ‘Gram-o-udya se Bharat-o-udya’ appears very attractive, the fact of the matter is that banks are reluctant to give credit for projects in rural areas.The agricultural credit in the form of Kisan Credit Cards (KCC) is more of a consumption credit while the project based credit that can lead to job creation is hardly available in our rural areas.  One of the biggest constraints has been the prevalent rules in our banking system wherein they insist on CLU approvals before considering a project for credit. Further, banks should be mandated to give at least 60 per cent of their project credit meant for setting up new projects to rural areas.

Ensure Setting of Quality Schools in Villages

Presently, only 9 per cent of CBSE schools are located in rural areas. This is a very unfortunate situation which strikes at the core of rural development. Bigger schools are not willing to set up schools in villages since they are not financially viable. As the cost of setting up schools based   on CBSE guidelines and affiliation parameters cannot be compensated by the limited spending power of the farmers, hence time has come for introducing the concept for fee voucher for rural CBSE affiliated village schools wherein the student getting admission should be given a fee voucher entitling him to reimbursement of Rs 15, 000 to Rs.30, 000 annually. If this happens, the bigger schools will find that setting up of CBSE schools in villages can also be financially viable and thus justice will be done to the students of rural belt that is home to 60% students but has 9% quality CBSE schools.

It is an irony that even as 60 per cent of our population reside in villages, the share of agriculture as part of GDP is only around 18 per cent, the percentage of CBSE affiliated schools in rural areas is only around 9 per cent and the percentage of bank credit for new projects in the rural sector is only around 15 per cent from the scheduled commercial banks.

With my unique experience of exposure to both an urban working set-up and a rural set-up, I can say with confidence that if above steps are implemented sincerely for the next five years, the above unfortunate situation, wherein cities are turning into slums and villages are turning into dens of unemployed youth, could be easily reversed and we could have a balanced sustainable development.


The author of the article is the Principal of NVN School, Palwal. This article is based on her grass-root level experience.

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