Farmers' protest is 'about politics, not economics', India's IMF executive director Surjit Bhalla tells CNN-News18

About the mandi system, the economist said that the government should be able to acquire food for the PDS system from the marketplace instead of the mandis

FP Staff December 12, 2020 23:43:38 IST
Farmers' protest is 'about politics, not economics', India's IMF executive director Surjit Bhalla tells CNN-News18

File photo of Surjit Bhalla.

As the protests against the new farm laws entered 17th day, economist and India's executive director at the International Monetary Fund (IMF) Surjit Bhalla said on Saturday that only a small percentage of Indian farmers are against the new legislations.

He also caimed that the farmers' agitation that entered 17th day on Saturday is "not about economics, but politics".

A noted economist, Bhalla was appointed to the IMF by the Appointments Committee of the Cabinet (ACC), headed by Prime Minister Narendra Modi, in October 2019. Besides India, Bhalla also represets Bangladesh, Bhutan and Sri Lanka at the IMF.

Building on his column in The Indian Express on Saturday, Bhalla spoke to CNN-News18 in the evening and said that the farmers that are protesting against the laws are "a few politically connected, rich, and pampered" farmers from "primarily two regions" of Punjab and Haryana.

Thousands of farmers have remained firm on their demand for the withdrawal of the contentious farm laws, and have staged a sustained protest at various border points of Delhi, amid the COVID-19 pandemic and a cold wave. Farmers have raised concerns that the new laws will weaken the provision of minimum support system (MSP) and the mandi system.

However, in his interview with CNN-News18's Zakka Jacob, Bhalla said that while it may seem like the protest has garnered widespread support from other groups of people, it could be possible that the people protesting on-ground could have political connections.

"It is clear that the political Opposition is out in force. To infer from the demonstration that all the attendees are farmers, that is a stretch. The numbers are clear — we know that there are around a hundred million farmers in India. How many of them benefit from MSP, APMC, etc? Wheat prices in India are 40-50 percent higher than world prices.

"So who's benefiting? It's not the 90 or 95 million farmers who don't produce for the market, they are not getting the price that the MSP guys are getting. Our stocks are overflowing. This is a problem playing out since the 1980s, when the PDS system was introduced," he said.

"The reason for the protest which is primarily being run by the rich farmers in Punjab and Haryana, is that they think their unfair rich days are over," said Bhalla, who has previously served as a part-time member of the Economic Advisory Council to the Prime Minister (EAC-PM). The EAC-PM is an independent body constituted to advise the government of India, specifically the prime minister, on economic and other related issues.

Bhalla also criticised the reported demand of the farmers to set a "legal" MSP like there is a minimum wage rate in countries around the world. He said that the minimum wage rate and MSP are "not comparable".

"Where would you draw the line? What about tomatoes, pulses, onions, jowar — on all of them we're going to have a price to placate that small unit of farmers? Why are we listening to a very small minority of farmers in two regions of India? The total number of farmers in Punjab is one million," Bhalla asked.

Bhalla also stated that the farmer protest is "political and has nothing to do with the economics".

"This is political or it's like the farmers are saying that 'we are the richest farmers in India, we are the least productive in India, please subsidise us'."

About the mandi system, he said that the government should be able to acquire food for the PDS system from the marketplace instead of the mandis.

"Who will lose if we went away from the mandi system?" he asked.

Speaking about the concern that the new laws will give rise to the hoarding of food, Bhalla said, "The NFSA says that income transfers can substitute for the food. If we're concerned for the poor, give them money; which is what the government is doing. So, you want to raise the incomes of the poor, you have to go through an elaborate system — first the government has to procure the produce from the mandis at a price to give to the poor. So, why not give the money directly to the poor? The best way to give income to the poor, can be with income transfers. Who said poverty relief has to be through food?"

Bhalla also claimed that there is crisis in Punjab and Haryana. "The people are being served less because of a few pampered, rich, politically connected farmers. That's all there is to it," he said.

On being asked about why economists like Montek Singh Alhuwalia, Raghuram Rajan, and Kaushik Basu haven't supported the new laws, Bhalla said, "They probably have political goals, however, several economists have come out in support of the laws."

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