Farm laws and the studied silence of India's original reforms team

The absence of bipartisan political thinking has resulted in many critical policy reforms remaining stuck

Gaurav Choudhury December 12, 2020 18:27:28 IST
Farm laws and the studied silence of India's original reforms team

Farmers shout slogans during their protest against the new farm laws. PTI

The reforms process in India is sometimes compared to the hour hand of a clock that one rarely sees moving on a continual basis. For India observers, this pace, or rather the slackness in it, has been a cause of persistent disappointment. Each piece of structural adjustment faces its own dynamic of resistance, pacing out its passage through departments, ministries and social and political stakeholders.

Next year, India's economic reforms programme will enter a man's estate after three decades of growing up. It is, therefore, rather ironic that the constituency for reforms still needs to be built up.

The flurry of 'reformist' moves over the past few months is a case in point. This is particularly true for those pertaining to the farm economy.

The rigidities that characterise India's agriculture have stood in the way of turning the "terms of trade" in favour of farmers.

India's peasants, a vast majority of whom are small or marginal owning less than two acres of land, have been facing a peculiar barrier. The price that they get from selling their produce is, at the aggregate family level, lower than the price that they pay for buying goods and services that they consume.

For instance, a tomato farmer's earnings from selling his produce during a season would, in all likelihood, be lower than what he would pay to buy goods such as garments or pay for health and education services. The terms of trade, thus, are tilted heavily against the farmer.

So, how does one rebalance this? One of the surest ways of doing this is to allow the farmer access to a market that will fetch the best price for his produce.

The newly legislated farm laws, the government has argued, seeks to precisely achieve this. But question, therefore, is why is there no bipartisan support to these pieces of reforms?

This question is particularly applicable to the original "reforms team" that brought India back from the brink of a balance of payments default in 1991 by ushering in policies that changed the course of India's history.

Finance Minister Manmohan Singh's 1991 budget speech on 24 July, 1991, quoted Victor Hugo "No power on earth can stop an idea whose time has come" to forcefully build a case for opening up India's economy and dismantling the licence-quota-raj system that had become embedded with layers and layers of inefficiencies, hurting India's prospects.

As finance minister Singh was ably aided by a team of accomplished technocrats such as Montek Singh Ahluwalia, who later helmed the erstwhile Planning Commission, leaving a rich reformist footprint across a broad policy landscape.

In a democracy, reform and policy making — be it of economic policy or of institutions — is essentially a political process. Political debates in Parliament, and outside, is a manifestation of this democratic phenomenon. Wider consultations, it is often argued, assist in expanding the area of the possible. There is no gain saying the fact that gradualism is more sensible than a big-bang approach.

That said, however, there is also an important learning from all these: a bipartisan and collaborative approach is imperative to yield the desired benefits.

For instance, in 2012, the Manmohan Singh-led UPA government had raised the prices of diesel announcing a determined fight back to revive the economy and walk the talk on fiscal discipline. The decision was greeted with countrywide street protests over fuel price hikes. Nevertheless, these agitations soon died down as the reason of fiscal rectitude began to sink in, over weeks and months.

The rather studied silence of India's original reforms team who had successfully piloted the nation by building a case for reforms in 1991 on the current attempts at farm reforms is, therefore, baffling.

In India, the absence of bipartisan political thinking across parties has resulted in many critical policy reforms remaining stuck in seemingly endless debates.

Economic reforms and policy making, like cricket, is a glorious game of timing. Quick decision making and speedier implementation are vital to turnaround the Indian economy, which until recently, was an engine for global growth.

In the final analysis, policy reforms and politics should cease to be mutually exclusive objectives. These should be seen only through a bipartisan, neutral and collaborative prism.

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