Congress grants farm loan waivers in Madhya Pradesh: Party's loss in Mandsaur shows its policy is unproductive
While Mandsaur turned into the eye of the storm and condensed poverty and destitution into one sentiment, Congress lost in Mandsaur and Malhargarh.
"Mandsaur ki kahani Mandsaur ki durghatna par khatam nahi hoti hai, yeh baat sarkar bana bhi sakti hai aur gira bhi sakti hai (the plight of Mandsaur does not begin or end with the incident that took place last year, and this is a reality that can either make or break a government)," Bhagat Singh Borana, a member of the Bharatiya Kisan Union — an organisation fighting for farmers' rights in all 51 districts of Madhya Pradesh — told Firstpost on the first anniversary of the violent clashes that erupted between farmers and the police.
On 6 June, 2017, six farmers were killed after the police opened fire on protesters seeking fair crop prices. The incident had sparked violent demonstrations that later spread to neighbouring districts. The protests were quelled after the central government deployed more than 1,100 personnel from the anti-riot force and 600 Rapid Action Force personnel.
While Mandsaur turned into the eye of the storm and condensed poverty and destitution into one sentiment, earning the Congress party good electoral returns in different districts across the state, the party lost in Mandsaur and Malhargarh constituencies.
Prafull Patidar, a farmer from the region, who was present at the protest, told Firstpost that Abhishek Patidar (one of the victims) and his brother Madhusudan Patidar were crossing over to the Piplya Mandi police station, which falls in the same Malhargarh constituency, and were fired at because the police suspected they were approaching the police station to burn it down.
The Mandsaur Lok Sabha seat comprises eight Madhya Pradesh Assembly seats spread over three districts. The Assembly constituencies are Mandsaur, Malhargarh, Suwarsa, Garoth, Neemuch, Manasa, Jawad and Jaora, which falls in the Ratlam district. BJP’s Yashpal Singh Sisodiya defeated Congress' Narendra Nahata in Mandsaur. In 2013, Sisodiya had defeated Congress candidate Mahendra Singh Gurjar by 24,295 votes.
The Malhargarh Assembly seat, reserved for Scheduled Caste (SC) candidates, was won by BJP candidate Jagdish Dewda who defeated Congress' Parshuram Sisodiya with 94,911 votes. In 2013, Dewda had won the seat over Congress candidate Shyamlal Jokchand. In Suwasra, BJP's Radheshyam Nanalal Patidar defeated Congress candidate Dang Hardeep Singh and in Garoth, BJP’s Adv Devilal Dhakad steered ahead of Congress' Subhash Kumar Sojatia with 63,033 votes. In the 2013 polls, BJP had defeated Congress candidate Sojatia. In Neemuch, Dilip Singh Parihar, who contested both the 2018 and 2013 Assembly polls on a BJP ticket, won with over 78,856 votes.
In the 2013 election, the BJP had won seven of these eight seats under Mandsaur Lok Sabha constituency, with the Congress winning Suwarsa Assembly segment and in 2018, the BJP bettered its record in Mandsaur despite farmers' anger. Bhramanand Patidar, a senior farmer leader from the area, told Firstpost that he received a call from Congress leader Jyotiraditya Scindia’s office two weeks prior to the ticket distribution, asking him to send his bio data to Bhopal headquarters of the party. He was expecting a ticket, which eventually went to a resident of Mandsaur city called Narendra Nahata, whom Bhramanand described as disconnected from rural distress.
Rajesh Patidar, an opium farmer from Mandsaur’s Badhuniya village, told Firstpost that the Central Bureau of Narcotics issues licences to eligible cultivators in October, and the general conditions to grant these licences are finalised between September and October. As a result, the licensing process and settlement of the accounts of previous seasons goes on even in October, and the measurement and testing of licensed fields continues till the third week of December, thereby delaying the yield to the summer.
He said that the BJP had distributed 36,000 licenses to opium cultivators in Mandsaur and Neemuch and had cleared payments of Rs 800 a quintal under the Bhavantar Bhugtan scheme. He said that just like loan waivers, timely measures taken to repair the damage caused to farmers has impacted votes; a see-saw of political moves, none taken to permanently heal farmers’ misery.
When Firstpost interacted with the family of Poonamchand, one of the six farmers who was killed, they said they were RSS supporters and were now disillusioned with it because nobody from the Sangh reached out to them in their time of need. Dr Kantilal Patidar said he had stuffed cloth into Poonamchand's chest when he had been shot, and that the members of the JK Jain Commission constituted to investigate the killings of farmers in Mandsaur did not record his statement.
Mukesh Kumar Patidar, a farmer and social activist from the region, said that Hindutva forces like the RSS and the VHP have been quite strong across the Mandsaur region and while farmer suffering comes and goes, affiliations to the BJP are unwavering. Despite poverty, ideologies have retained a hold over loyalties and politics is still played over it. BJP’s Sudhir Gupta, member of Lok Sabha from Mandsaur, told Firstpost that the Congress amplified farmer distress to garner votes by first lighting the fire and then pretending to douse it.
On the one hand, the former BJP government failed to prevent a violent incident from taking place and passed off higher yields and Krishni Karman awards as markers of general agricultural prosperity in the state. It then absolved the state machinery of any responsibility for the killings reported in the JK Jain commission report.
On the other hand, Congress, despite Rahul Gandhi and Jyotiraditya Scindia’s campaign visits to the Mandsaur, failed to earn the faith of the farmer by offering to break the trader nexus or by envisioning ways to ensure increase in income and decrease in debt. Instead, on his first day in the Chief Minister’s Office, Kamal Nath signed the file for waiving loans of up to Rs 2 lakh of Madhya Pradesh farmers.
The Reserve Bank of India takes a dim view of the loan waiver programme, as it sets a bad precedent on credit discipline. In the book ‘India’s Economic Resurgence: A Modified Paradigm for a Welfare State’ (2018), it is stated that 'earlier, states probably had multiple tax avenues to generate resources for handling the loan waivers. With the single tax GST system rolled out from July 2017, states will have to adjust within the budgets or resort to public borrowing to cover the impact of farm loan waivers’.
The central government does not refinance states for loan waivers and states have to find the resources by themselves. Incidentally, this is the third consecutive year where the states have failed to meet their gross fiscal deficit (GFD) target, the RBI has stated, adding this comes despite expectations of an improvement on higher devolution from the Centre. At a countrywide level, farm loan waivers alone contributed to a third of the overall slippage worries, with a 0.05 percent slippage of the overall 0.13 percent on revenue expenditure, the RBI said in a study on state finances based on state budgets. It added that states which have announced the waivers have also reported a decline in capital expenditure and that loan waivers come at the cost of development.
In 1990, nationwide farm loan waivers were announced for the first time and they cost around Rs 10,000 crore. In 2008, Rs 52,000 crore were released by the Indian government as part of the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS). In 2008, the CAG audit revealed lapses and errors like fake claims, an inclusion of ineligible beneficiaries, and massive reimbursement from a lending institution without proper verification.
On many occasions, the farmers entitled to receive the benefits were not included in the list of beneficiaries by the lending institutions. Many farmers tend to use the loans for non-agricultural purposes. Besides, loan application receipts or acknowledgements from farmers weren’t properly maintained. Speaking on the state of the Indian economy recently, former RBI Governor Raghuram Rajan has said: “It (loan waiver) often goes to the best connected rather than to the poorest. It also creates enormous problems for the fiscal of the State once the waivers are done.”
Instead of understanding the reasons that drive farmers to take huge loans, be it pesticides, high-tech equipment, high quality seeds and fertilizers, temporary solutions are offered to lift the farmers from debt without envisioning solutions that successfully subverts the recidivism. In 1998, 24 farmers were fired at by the police administration in Betul district's Multai after which the then Chief Minister Digvijaya Singh’s government was ousted. Multai came back as Mandsaur in 2017 and a new government has come to power in 2018, but the story of farmer distress continues to reek of political posturing.
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