Rural India

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Farm Gate Prices And Urban Apathy…

Published June 16, 2016 by vishalvkale

Today’s Indian Express carries an interesting article on the rural landscape of India, bringing to the fore a superbly balanced presentation of the farm gate prices issue: should farmers be able to sell as per their choice, and not just through the APMC-demarcated regulated market   yards and auctions. This raises many questions, as we shall see. But first, the article in question:



APMCs were originally established with a view to prevent exploitation of farmers by intermediaries, who compelled them to dispose of their produce at the farmgate at very low prices. By mandating all farm produce to be brought to regulated market yards and sold through auctions, the APMC mechanism was meant to ensure fair prices to farmers. But in many cases, these bodies have themselves become dens for cartelisation by traders, who control prices and charge hefty commission fees on produce transactions.

An extreme case that surfaced recently was of Devidas Maruti Parbhane. This farmer from Vadgaon Rasai, a village in Pune district’s Shirur taluka, supplied one tonne of onions early this month at the local market yard under the Pune APMC’s jurisdiction. The price he got — a little more than Rs 1.5 per kg — was itself very low. But adding insult to injury was the various “cuts” imposed on top of this.

A scrutiny of Parbhane’s patti (trade slip) by The Indian Express revealed his total revenues from the sale of one tonne of onions at Rs 1,523.20. The total cuts even on this meagre amount added up to Rs 1,522.20. That included commission fees of Rs 91.30, hamali or labour charges of Rs 59, bharai or filling-in-bags charges of Rs 18.55, tolai or loading charges of Rs 33.30, and transport charges of Rs 1,320 (as the kutcha patti issued in Shirur was billed for delivery at Pune). Parbhane, at the end of it, was left with a net earning of Re 1: “When after the auction, the trader handed me a Re 1 coin, I was flabbergasted. Maybe, he should not have taken the trouble to pay me even that!”

Traders, however, dismiss these as one-off incidents, while claiming that delisting of F&V would ultimately hurt even farmers. “The produce brought by farmers is not uniform, which is what processors want. The APMCs are tuned to handle variety. Here, we have 50-55 varieties of vegetables and 25-30 varieties of fruits arriving on a daily basis. Such variety will disappear once delisting happens. Moreover, instead of a centralised marketplace, you’ll have small and medium vehicles carrying farm produce and creating traffic mayhem in Mumbai,” warned Rajendra Shelke, a leading onion and potato commission agent at the Vashi APMC.

Besides, the APMC system guarantees that the farmer is paid for his produce, which wouldn’t be the case if he were to sell directly? “The proposed reform looks good on paper, but it will only spell doom for the farmer and end up completely destroying the agrarian economy,” he added.

Sanjay Pansare, who represents traders at the Vashi APMC’s fruit market, justified the high commission rates on grounds that the goods being handled here were perishable and prone to quality deterioration. Only around a quarter of the produce brought to the market is eventually of the best quality; the rest falls between medium and bad. The losses borne by b on this count have to, therefore, be made up through higher commission fees. Since 2002, the Maharashtra government has been issuing marketing licenses to various entities for procuring directly from the farmgate. Besides, 34 private markets have been allowed to be set up. But despite this, an estimated 75 per cent of annual arrivals of F&V in the state still take place in APMCs. The proportions are lower at 46 per cent for cotton and 25-30 per cent in oilseeds and foodgrains.


The good part of the article is for the first time in my reading at least, has someone tried to place the other side – the benefits from traders to farmers; for too long, we have been treated to articles that focus on the low farm gate prices prevalent in India. Such an approach suffers from one major disadvantage: the bulk of purchasing happens through these regulated markets; these are an intermediary reality that cannot be wished away; they form an ecosystem within the economy, have large dependencies of families as well as business connected to them.

Any change process can only be successful when both sides of the coin are taken care of; the concerns of the traders need to be met head-on and dealt with, as, regardless of the question of compensation to farmers, they currently fulfil a market function. This is where a slow and planned change can bear results – as seen in the example above, wherein the procurement for cotton and oilseeds, foodgrains are at much lower percentages. Full marks to the Maharashtra state Government for crafting a graded transition to the newer system!

It is heartening to see Maharashtra and Delhi take the first tentative steps towards making a fair and balanced system for all; this is something needs to be taken forward in all states. Therein lies the major issue- it nationwide implementation. Sadly, I have not come across more coverage, or at least focused and concerted coverage in the media on this vital aspect. While Foreign Policy, Political brouhaha, Make In India etc find coverage and deep, informed, threadbare analysis – this is all but absent in this matter. As a net result, sporadic articles spring up in the media, and the public remains mute, unconcerned and uncaring regarding this matter. While the other initiatives will impact Urban India immediately, and Rural India through the trickle down effect over time – this will have a  much faster and potent impact, given that more than 2/3rd of India is Rural…

This is a systemic change, deep and layered; it does not have the dramatic, esoteric and visual impact of  Make In India, or Digital India or the other steps of the Government; and yet, it is equally, and in some ways more effective in ensuring the development of our nation; it is also something that the internet generation, social media, mainstream media and Urban India just do not have an interest in, which is truly sad.  Frankly, this state of affairs is a brutal indictment of Urban India

The shocking example above exposes the state of affairs – that the farmer is not getting anywhere near enough; other data and proof in the for of articles can be provided; let us take Onions as an example. How much do we pay in retail? 20/- a Kg – 30/- a Kg? At times, 40/- a Kg? How much of this should the farmer take home? Prices to farmers have even gone as low as 20 Paisa a Kg. We hear a massive hue and cry when prices shoot up – so why are the people and the media silent now? Why is there total silence on such a vital matter? Because it doesn’t impact Urban India?


The bumper harvest this year, however, has left farmers in tears with reports suggesting that prices have fallen to an all-time-low of Rs. 30 paise per kg at Madhya Pradesh’s mandi in Neemuch district. “There has been surplus onion production across the country this time, and the demand is relatively low. The farmers are badly hit as they spend at least Rs. 12 per kg in the entire process of producing the crop, excluding their labour cost,” said Rajender Sharma, member of Azadpur, Agriculture Produce Market Committee (APMC).

In Delhi, which primarily relies on these two States among a few others for onions, the situation is equally grim. At the Azadpur Mandi, the kitchen essential is being sold at Rs. 7.86 per kilo on an average. The best-quality onions are being sold at a wholesale rate of Rs. 10.5 per kg, whereas the poor-quality and the smaller ones are being bought by traders at Rs. 4.5 per kilo. The retail prices in the city range between Rs. 18 per kilo and Rs. 20 per kilo.

Did we read much of this in  the Media? And do note the difference between retail and wholesale prices; and ask yourselves some questions on tis state of affairs. Also do ask yourself is it fair that these matters take backstage to the much more visual steps that directly impact Urban India – and also ask yourself how can we change the state of affairs?

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Participative Growth – The Need For A 3-Pronged Approach

Published February 14, 2016 by vishalvkale

It has been stated that Industry level growth is the key, the answer to India’s many woes, that industrialisation and its attendant advantages will ensure growth eventually percolates to all levels of society. The caveat in that line of thought is “Eventually” : just how long is eventually supposed to mean? How many lives and generations will have to suffer the pangs of poverty till that eventuality transpires? And, what do we do in the interim?
These people are equal to us, the privileged class – the ones with education and great {or good or even average} well paying jobs. They are our equals in every single way; they have the same rights as us, they have the same dreams and desires as us. The luck of birth, and the chance of education that has been provided us has ensured we live well, by the grace of God. Granted that some among the poorer classes do manage to break the shackles and grow out of poverty; but does that mean we forget the rest of them?
There is a tendency, a rather unfortunate tendency, among the educated classes to equate GDP growth and Industrialisation with the concept of solutions to poverty. That is unfortunate; granted that it is one of the factors that lead to resolution – but this path does not take the full picture into consideration. That Industrialisation is needed is a given; again, a correct observation. I dont differentiate between manufacturing or service here – the creation of options that can be filled by educated people is a needed reality, one which is not upto to speed in the current economy. But who will benefit from this Industrialisation?
The educated people – that is who. The ones with a professional college degree will get the best jobs; the ones with some basic college degree will land jobs and careers that ensures a stable decent life for them and their families; the high-schoolers will get the next level of vacancies; the rest will make do with poorly paid menial jobs and temporary jobs. Some will take advantage of become entrepreneurs, unlocking further jobs and careers for people – but entrepreneurship also generally requires education and a defined skill-set, although service sector entrepreneurship is a different ball-game altogether.
The problem is that the current generation of the poorest segments just cannot afford education for their children; so the question of them benefiting immensely {beyond labour jobs, often poorly paid} does not arise. It only increases the gap; this does not mean we dont industrialise; this does create jobs – even though they are poorly paid ones at the bottom of the pyramid. The key is get out of this vicious circle of poverty. That can only happen throughthe enabler of education, nothing else.
Industrialisation in such an atmosphere does create jobs at all skill levels, but the better jobs that can ensure a proper life are reserved for the educated, as these require certain skills. So how do the poorest and the poor break the barrier? It is manifestly infeasible. There have been jobs created – Engineers, Entrepreneurs, Doctors, Professionals, even Clerical Jobs, Service jobs – a whole new paradigm of change has happened with economic growth. That is beyond debate.  Poverty has also reduced; people have gotten better off, No one can argue with that; the evidence is there for all to see. But we cannot rest on our laurels; not when you see the remaining poor all around you.
Menial jobs for the uneducated and low clerical jobs for the less educated {upto 5-10 years schooling} have been created; these just dont pay enough to ensure a full education to the children often enough. The pace of creation of jobs has also not kept up with the demand, So how to get out of this? Change is happening; but the pace of change is slow; almost too slow. That is the main point of concern for us as a people. We need to increase the pace of change, the pace of growth – as well as ensure that it percolates to the most hapless people in our midst. Like us, they are equal citizens, and we should do far more to ensure they grow.
How do you ensure that jobs lead to development at all levels, without education? How do you ensure that education without jobs will lead to happiness? Both are recipes for trouble; that said, it is true that the latter – education without jobs – can be more harmful as it has the potential to unleash frustration among the educated unemployed. But does that mean we forget the benefits education brings, and place education on a back burner, and not on centre-stage, as the cynosure of all our efforts to modernise our nation and our economy?
What is needed is a balanced approach  – one that caters to Industrialisation, as well as a full scale war-like approach towards education. While the former is happening, the latter is not yet in the public imagination, or Government policy, judging from media space as well as action on Start-ups, Economy, FDI, GDP, Industrialisation etc. Even this two-pronged approach has its disadvantage – it leaves out all of the Agricultural sector from its ambit, where the farmers and the labourers just aren’t earning enough to ensure anything other than a basic life.
And the Rural community, where the farmers and the landless labourers are concentrated, form the bulk of India. We, the Urban Indians, are the exceptions; they are representative – as they are in a majority. High time that we Urban Indians faced upto that hard reality!
And that is yet another reason why Agriculture and its problems need to be defined properly, and solved at the earliest; that can unlock earning potential faster than any other avenue or venture available to us as a people. That will also tend to reverse the trendline we saw in my previous article – with rising imports increasingly becoming a reality

We need to enable the government to allocate more attention to the development of Agriculture than it currently does; that can only happen if the voice of the people reaches the government in a democratic fashion, in Media articles, through people’s letters, small {tiny} forums like this blog and its readers and so on and so forth. Urban India needs to realise and understand that improving Agriculture will lead to improvement of the Urban scenario as well, that it is far more important to elevate our villages than it is to build Urban Infrastructure, given the paucity of resources we have! What these initiatives can be forms the next part of this series on participative growth…

Famers, and The Urban Indian

Published February 2, 2016 by vishalvkale

The past few months {and more} have seen a whirlwind of news regarding great moves by the NaMo Government; highlighting a series of developments and laudable initiatives by this Government by the Media as well as the Bhakt Brigade on Social Media. That is indeed good; a positive environment engenders a powerful impetus towards growth, and is a significant factor. Positivity engenders growth and development, problem resolution in a manner negativity can never do.
In all this euphoria and positivity, one factor lies ignored; the status of the Agriculture Sector. This article isn’t about The NaMo Government, but about our {Urban India’s} response – or lack of it – regarding the Agriculture Sector, about how it has taken the back seat, and about how we just don’t respond, or are not even aware of, the status of this sector, its issues and the problems that plague it. While news regarding Farmer Suicides reaches us due to the sensationality factor, the real issues and problems this sector faces never reach us. And for that, we the people are to blame.
Rising Farmer Distress in some parts of India, for example in Maharashtra is but one aspect of this; the aspect of drought that has hit large tracts of India is another and potentially more troublesome and serious a factor to hit us. Add to this the lack of serious attention to the myriad problems that inflict the agricultural scenario, like Seeds for example, or unbalanced fertilization to take another pertinent and current example.
And yet, despite the scale of these problems, neither the mainstream Media or the larger Social Media is focussed on these factors; the large number of news articles, updates etc are built around digitisation moves of the current Government, Smart Cities, Bullet Trains, Railway Modernisation, Make In India, Digital India, FDI and Economic Growth, Basic Office Hygeine steps by the NaMo Government, Aggression {long-needed} towards the needs of the Armed Forces etc.
Not one of the points listed above is unimportant; not one is without value. Each step truly laudable in its own right, and very welcome. Credit where credit is due; fact is fact. But critically and interestingly, Crop Insurance apart, no news in relation to the Agriculture Sector has made it to Social Media, or to the News that I am aware of – not to the tune of the others, those I mentioned above. That means either the Government has done nothing; which is highly debatable – given that there is a ministry devoted to this; or that we aren’t aware of it- which is far more likely.
The state of affairs in Indian Agriculture is there for all to see, and requires no data to prove it. The shocking evidence of your eyes should shake anyone from stem to stern, with rampant poverty, and abject conditions the moment you move into the Rural parts of India. And yet, we Urban Indians continue to bask in the glory of moves and steps that largely benefit Urban India; I refer to Smart Cities, Make In India and Bullet Trains etc. Even the praise of Digitisation in Social Media hovers around facilities for Urban Indians! Why doesn’t the status of the Farming Community in India reach the consciousness of us Urban Indians?
The news that is coming out is disturbing, to say the least; The Maharashtra government has declared a “drought-like condition” in 14,708 of the state’s 43,000 villages. This means the drought covers 34% of the state, as per a Times of India Report. Another Hindustan Times report states As of Nov-end, nine of India’s 29 states had officially declared a drought, and 302 of the 640 districts are living in drought-like conditions.  That is approximately 50% of India. Another report from October categorically mentions : For India to grow at 8%, agriculture must grow at least 4%. Yet, the farm sector has barely crawled at 1.9% in the first quarter (April-June) this year. It could get worse when the effects of a widespread drought become visible in the next few months.
The same report goes on : Between April 2014 and February 2015, the value of India’s farm exports dropped nearly 3%, as prices in global commodity markets fell. In August this year, tractor sales were down 23%. Rural wages rose at a slower 4.6% pace in a 12-month period ending in June, compared to a 12% rise in the same period a year ago.; earlier, the same report made this point : Alarmingly, a rural distress — marked by slowing wages, poor incomes and lower profits from farming — now looks getting entrenched.

{Image Credit : Hindustan Times, article linked in references}



Another Hindustan Times article strips the Urban Indian naked in this blunt statement, which I fully endorse : Obsessed with the latest, hyper-emotional social media trend, India’s people and mass media are all but oblivious to Bharat’s emergency situation. The only national newspaper that has consistently followed collapsing farms and failing rains is Mint. As of last week, nine of India’s 29 states had officially declared a drought, and 302 of the 640 districts are living in drought-like conditions. If you ask why none of this is on India’s primetime television shows or splashed on front pages, I will only say that the media, in general, are not interested and neither, dear reader, are we.Sad, but a completely factual indictment of the status of Social Media.
The same report had made this point : The data indicate the essentially dead-end nature of Bharat’s jobs and realities and a worsening farm economy, which grew only 0.2% last year. If it grows that much this year, we should be lucky. The under-reported and largely ignored farm crisis has been made greatly worse and more urgent by two years of scanty rain. Fact upon relentless fact can be piled up to build the case of neglect by we the people in our consciousness…
Going further, a Reuters report goes even further, with facts : Last month, India made its first purchases of corn in 16 years. It has also been increasing purchases of other products, such as lentils and oilmeals, as production falls short. Wheat and sugar stocks, while sufficient in warehouses now, are depleting fast, leading some traders to predict the need for imports next year. The same report also has this stunning statement from an analyst : “There’s a complete collapse of Indian agriculture, and that’s because of the callous neglect by the government,” said Devinder Sharma, an independent food and trade policy analyst.
In our Euphoria about the various Urban developments, somewhere along the line, the hands that feed us, the hands we owe everything to – the farming community in India, lie forgotten. This does not reach the awareness of Social Media, which is busy extolling the virtues of Urban Development and the various and admittedly excellent steps undertaken by this Government in its tenure so far. The reality of the farming scene is  not even on the radar of Urban India.
Furthermore, the other side of the story lies forgotten. I had noted categorically in my budget analysis last year, and I quote : And then, you expect the states to implement what is in essence a centrally thought plan. While the plan to devolve to states is laudable, there is a dire need to pull up recalcitrant state governments.{ http://reflectionsvvk.blogspot.in/2015/03/is-this-government-on-wrong-path.html}
Note this article from The Indian Express, which corroborates and confirms my reading of the state of affairs:  “During the UPA regime, the Centre contributed 90% for the initiative while the state pitched in with another 10%. But following the Narendra Modi government’s decision to slash central assistance for most centrally sponsored schemes from April 1, 2015, the Centre’s share has gone down to 60%. A condition that this reduced share will be released only after states release the matching grant was also imposed. Given the fund squeeze in the state, officials admitted that funds earmarked for the scheme in 2015-16 have not been released to districts so far. The scheme is applicable in 33 out of the 36 districts in the state. With funding support drying up, it has now come to light that the societies have tapped into the unutilised development funds marked in 2014-15 for the farmer training initiative for meeting salaries of the staff. {Jan 7, 2016}
Farmers produce the food we eat; this is a fact. Their troubles should be on the forefront of the nations’ priorities; alongwith the needs of the Armed Forces. The proofs and reality given above bear mute testimony to two realities : one is the lack of awareness and churlish attitude of Urban India towards the farmers and rural India; and the other reality being the gap highlighted by the Indian Express article on the change in the method of operation of UPA vis-a-vis NDA, which is exactly what I had foretold long back. I am sure the Government will learn and take corrective measures {Note article from reuters}; question is – will we, the people, wake up and understand that it is the Rural India that requires our helping hand? That extolling Urban Developments alone does not suffice? Will the Urban Indian wake up? 

References : 

The Absence Of A National Dialogue

Published January 19, 2016 by vishalvkale

The Absence Of A National Dialogue
The title will surprise many, but that is precisely my contention; that we lack a national dialogue; a consistent, strong and clear discussion on the matters that really matter to us as a people. We are very quick to discuss on Social Media issues relating to Religion, BJP Government, AAP {particularly denouncing it}, Rahul Gandhi / Congress, Arvind Kejriwal, Indians Abroad… but are almost totally silent on any number of issues that are far more relevant, important and critical to us


AGRICULTURE

You will not find many posts, mentions on agrarian distress, drought conditions in several districts, condition of Small and Marginal Farmers, lack of farm profitability, abysmally low farm-gate prices, lack of facilities in the agrarian belts, the problems faced by the farming community etc. And yet, even the smallest step taken for the emancipation of the above problems gets highlighted excessively.

That the positives are highlighted is welcome – but this happens without an attendant and equally vocal attention to the problems being faced by farmers. Therein lies the problem; you cannot have a complete picture of the ground reality without a full picture. What we see is an abundance of noise and adulation on steps taken for farmers – but almost zero attention to the reality of the farming scene in India…



THE ECONOMY

Similar is the case with the Economy; let me take just one small example to make my point. The structure of the Indian Economy is skewed heavily towards the Small and Medium Enterprise; as previously pointed out on my blog, the contribution of the unorganised sector to the Indian Economy is in excess of 40%, in the range of 45% – 60% {Refer the review of the book India, Uninc by Prof Vaidyanathan for full details}

And yet, a glance at the Pink Papers, Media, Social Media would completely belie the above in its totality. Rare is the article that goes deep into this aspect of our economy, which employs more people, contributes more to the GDP as well as to savings, and is the engine of India’s growth as well as consumption and savings juggernaut. Anything to do with Corporate Business gets immediate attention; is analysed threadbare – but not on this most vital of sectors of our Economy.

Its needs, wants, bottlenecks and requirements never reach the educated classes, So much so – it took me, an MBA with a regular reading of News and Books well over 14 years work experience to get introduced to the scale & scope of the Unorganised Sector and its contribution – and even that took a book that I spotted in a mall {mentioned above}



EDUCATION & HEALTH

This stands as the most neglected sector of all, with near-zero attention; in my opinion – even more neglected than Agriculture. The fact is that we spend very little {as a % of GDP allocation in Budget} on Education & Health gets a mention – but few people question this. Conversely, politicization of education – by any party – gets headline news for weeks – but the lack of attention to both these factors nationally hardly merits a few erudite articles and analyses in some select serious media outlets!

We rarely stop to think how can we improve the lot of the people among the not-so-lucky; how can they partake in the improved opportunities that growth brings without good health and education! Is it due to the blind spot we have – being educated, living in Urban Agglomerations, with good jobs {mostly} – leading us to forget that there are others who don’t have the advantages we have had due to our lucky parentage, which is strictly speaking an accident of birth?


THE CONCLUSION

Each of the points above ideally needs a dedicated article unto itself to do it justice; furthermore, there are other relevant issues that can be included in the list that get ignored. The list above is neither representative, nor is it exhaustive. Sadly, basis what we have seen and read till date on Media and Social Media both – you have to hunt for updates and information relating to these vital aspects of our nation.

How is Religion, Pro- or Anti-BJP, Pro- or anti-AAP etc going to influence the direction of policies in any way? Regardless of how much social media noise is generated, regardless of how much attention and coverage these generate, how is it going to help in any practical and definable way? In fact, in some cases it stokes arguments and verbal duels as can be seen in comments on facebook updates {as an example}

If we can focus so much attention on these frankly irrelevant and unimportant matters, post updates on them in Social Media, attempt to influence your readers, friends etc, or inform them – then why cant we also show due interest to real matters, matters of far greater relevance? We can update a deluge of updates praising one Government or the other, and yet maintain complete silence on real matters – Education, Agrarian Distress, Rural-Urban Gap, Health, Indian Armed Forces, Economy?

Similarly in the Media, one can read threadbare and in painstaking detail {or watch to be fair} news relating to so-called “current events”, in minute-by-minute breaking news and updates – but almost nothing by relative comparison on these real issues. How difficult could it be, just increasing space and/or time for analytical articles and snippets on these real issues, factors that will determine the pace of our growth?

What is happening is that as a result, there is a complete of a national dialogue around the real issues that matter to us as a people, as a nation. The lack of awareness of the people at large {basis personal experience of my own self} leads to a total silence on these matters, compared to a deluge of information on the other matters, which are relatively minor – and some might even be called debatable as being “matters” of relevance.

If the belief in the people is that by sharing updates on Religion and related matters, Historical wrongs, Pro- or anti- Government, Personality-specificity etc – one can influence public opinion, then the same holds true for the real issues. And if you don’t believe in the power of Media, then why share on your social pages, and why write or create on your Media?

And, if this medium does hold power – both Media as well as Social Media – then what does our silence on the real issues say about us as a people? Why are we sharing and reading avidly on Religion, Political Parties – but ignoring the really important issues, issues that are vitally important to the nation? What does this behaviour say about us? 

Modi Sarkar : The First Year… Worrisome Portends and Trends

Published May 23, 2015 by vishalvkale

This is a short and truncated analyses; the full analysis will take time, and will be rather long – and will appear on my main blog, @Reflections in the due course of time. I am only covering the main points here. Please follow me if interested. 

Before I present the negatives : Let me state that it is too early to call this Government good or bad; one year just isnt enough. The following points are indicators that can be used as guides. I am not presenting the positives; there arent very many, as per me. There is far more to worry about, and far more that needs to be explained. 

My View : Negative at worst, and Zero at best… {First time I find myself in agreement with the Congress / Rahul Gandhi!}

Note : All Block-quotes are from my own articles

A lot has been said – and repeated ad nauseum by media and fans alike – way too much of the positives, which may or may not have any bearing with reality. Let me present the other side… the worrying aspect…

1) CENTRALISATION OF POWER
There is a clear and marked trend of centralisation of power; this brings uncomfortable memories from the past. This Government is decidedly about one man, and one centre. Not my idea of an ideal Government, frankly. For a distributed and diverse nation, centralisation is not the answer; a judicious mix of central command with a federated approach is the need of the nation. This is clearly absent; where present – as in Economics, the follow-through is exceptionally poor. This Government is about one man. And that is bad, period.

2) URBAN FOCUS

Read : Farmers see income gains vanish in Narendra Modi’s inflation war

Not one of the problems of Agriculture has been dealt with; as a matter of fact, there is rising discontent within the farming and rural community that is going to hit the electoral prospects of this Government in the near future. What do we need more : Smart Cities, Bullet Trains – or Rural Roads, Seeds, Canals, Schools, Connectivity, Market Access, Fair Remuneration and Price Realisation?

The villages of India have clear priorities : they are primarily agrarian economies, with farming and related activities as a base. The fact of the matter is that digitisation, urbanisation etc are not their primary concerns, Their primary concerns are bread and butter – same as everyone. And in that, they require bridging lab-to-farm knowledge, irrigation, better and faster access to markets, credit terms and avenues, seeds, better price realisation at farmgate… what is being done in these fields with the same level of Government attention, focus, speed and execution urgency? Nothing!

Take Smart Cities Concept as an example. There are two data points available : 5th Economic Survey, 2005 and NSSO 2011, Both tell the same story: Smart Cities are nothing but a fantasy. They are premature, they are the future, but very premature. The Idea is right, but a decade or two too early.

As per the first, there are 41.83 Million establishments in India; 76% of these worked without any power; employing 100.9 Million; 46% were own account establishments. As per NSSO 2011, 66% were OAE; retail trade slipped from 42% to 30% and ,manufacturing grew from 23% to 31%. Own Account Establishments were 60% of retail, 72% of Manufacturing, and 63% of service. Contribution to the GDP : between 46-58%. Statement of Simple Fact.

Now try and fit a smart city somewhere in all that.

What does the nation require? Research shows that nearly 93Million of our farmers are losing 800-odd per crop; data shows the level of poverty in our nation; consumption trends corroborate, with the top 10% growing at a rate of 3% as opposed to 1% consumption growth for the bottom 40%. Farmer suicides are going up; the economic fundamentals are shaky; the global economy is in unprecedented turmoil, and all we can think of is Smart Cities?

Our Armed Forces are in dire need of funds; and all we can think of is Smart Cities? Wow. Fantastic priorities.

We spend the lowest in GDP terms on Education, Defence and Health, and all we can think of are Smart Cities?

Besides, a Smart City requires – DATA CONNECTION. Being a Telecom guy, I now how ridiculous and ill-conceived that notion is; We in India have average & unreliable speeds of around 1,5mbps; the developed nations have a speed of upwards of 22mbps. They have high penetration of credit and debit cards and acceptability of online commerce; we dont. India has precisely 73Million broadband connections – this is including individuals with a double connection; I have three. Less than 69 Million Indians consume more than 512mbps of data on a monthly basis; and cashless transactions are unknown outside the protected environs of top places.

The logic is sound, I clearly stated that concept is needed – but a decade or two too early. This will work in a relatively corruption-free atmosphere, where the Land issues are under control. That we dont have. Next, this works in economic reality which enable the above, which again we dont have, as I have been at pains to point out.

The shift to the small cities will not happen in the industrial sector; the vast majority – upto 90% – of the actual producers are concentrated in only a select few agglomerations, namely Mumbai, Delhi, Chennai, followed by Kolkata, Bangalore, Pune, Ahmedabad. Other second-level sites are Nashik,Hyderabad, Coimbatore, Ludhiana, Kanpur, Rajkot,Surat. No one else comes even close to these cities, although Jaipur, Chandigarh, Hissar, Nagpur and a couple others do try hard.

The shift will not happen from these established centers; there is in existence an ecosystem that now is impossible to replace,. with manufacturing facilities being deeply interlinked with their vendors and suppliers who have now set up in the same or nearby areas. In B2B industries, a symbiotic relationship has started with the consumers and the manufacturers sometimes co-located, or located within 8-10Kms of each other.

The proof is in the manifest failure of industrial areas in other wannabe metros, like Indore and Bhopal, which have simple failed to take off. They remain consumption and trading centers, not producers, despite an incredible level of support given to them by successive Governments. The failure of Bhilai to rise as a comparable center to even Nagpur, let alone Surat & Rajkot, is a case in point.

What nonsense are we talking about?

We dont need Smart Cities, We need Schools, Colleges, Primary Health Centers, Rockets, Mortars, Fighter Aircraft, Missiles, Satellites, Seed Research, Irrigation, Water Purity for Agriculture, Extension Workers to teach our Small and Marginal Farmers, Redoing our Duty and Taxation Structures, Fair prices for farmers at farm-gate, cement or pukka roads, etc etc. A smart city can come after that.

3) DEFENCE, EDUCATION AND HEALTH
Let us take just one – Education as an example  :—->
Is This Government On The Wrong Path? :


Now look at education. You first shout to all and then some – education is the focus, we need a school every so-and-so Kms… And then dont budget for it. And on top of it all, in a classic mark of crass stupidity, increase allocation to states – without ensuring a mechanism for extracting value of this excess fund flow to the states, quite a few of whom are known for fiscal profligacy of the worst kind. And then, you expect the states to implement what is in essence a centrally thought plan. While the plan to devolve to states is laudable, there is a dire need to pull up recalcitrant state governments. Interested people can go through this report : State Finances – RBI Report

What has been done to ensure buy-in by stakeholders at the state level? What has been done to improve efficiency of monetary utilization in the states, and ensure that the excess funds dont get spent in idiotic schemes, for which quite a few of our states are famous? If the states were so efficient, they would have already improved on-ground governance, which they havent. One look at state budgets is enough. What mechanism has been implemented – or is being planned to be implemented – to ensure that the states’ budgetary health improves, and that real value for money spent is obtained? This is what I expect a good PM to do, a good central government to do! 

4) FOREIGN POLICY
Too early to state anything here : results – positive or negative – require time to present themselves. I only state this : 

In FP, image means nothing; it is immaterial. FP is a matter of hardcore strategy, deliverance on words, hard power, and economic give and take. How a nation is perceived is of no relevance. Thus, a better global image makes us feels better as Indians, but counts for precisely nothing in Diplomacy, and that is an absolute.

If you sift away the hyperbole and focus on the hard facts, there are no achievements – precisely zero as on date in FP by this Government. FP changes take time to reveal themselves; let us wait and see.

Now, for example, if the Government had played hardball with USA, and negotiated well with EU, taking Brics along there was an even chance of splitting the combine straight down the middle; in FP, the $$$$$ reigns supreme. It matters little if you are an asshole or a murderer {Read history for real examples of both – Pakistan, or any number of other evil leaders who were hailed by The West} : if you can deliver $$$$, you are a good man, Read the 1971 war and its prelude, or Iraq or any number of other facts. This is beyond debate, I am afraid – and is not open to question.

So far, I have seen nothing except talk talk and more talk.

Talk is cheap. Even I can talk! Look above {EU example} for proof! Where;s the real action????? He has changed many a paradigm of our FP, and the effects in FP can only be observed over a long period of time. Personally, I am extremely uncomfortable with the FP as on date; at least insofaras USA, Israel and China are concerned.

There is no record of even one nation {non-European / Developing} that has benefited from a close association with the USA; quite the opposite. Add to that the recent revelations on arms aids, intelligence – the net result seems negative. Recall the previous time India and China tried to come close.

And ME-Israel? That is a sea-change : requires deep analysis for a thorough perspective. I am worried.

5) BUDGET

The budget document is also a strategy document, it reveals your real priorities. If you are not putting your money where your mouth is, it clearly raises the suspicion that you are insincere in your words, or you have no idea what you are doing – or you have compromised. And dont have the guts to say so openly. And that is precisely what this Government’s actions in totality are stating to me as a worried and concerned citizen. I am already on record accepting that this is the best Government we have had in a long time – and if this is the best we can do, we had better get seriously worried!

Full analysis here : The Union Budget 2015-2016 : Glaring Holes

This budget has been justifiably praised on any number of points; sadly, it has got no praise for the two biggest points in its favour : The focus on the unincorporated sector, and the change in the duty structures. But most critically, there has been little critical appraisal of its faults, which are numerous.


This is a budget for Corporate India, and the top 20% of society. As I noted in my previous article on this budget,  Defence, Education, Health and Rural India are the priority sectors for us.

If poverty is reduced, in addition to a growing economy, we also require an educated and healthy population, which means an effectively functioning primary and secondary school set up, increase in facilities and so on. We already have an excellent higher education set up. If on the one hand you are pitching yourself as pro-poor, and on the other, you are increasing focus on high education and cutting on schooling spends in terms of a percentage, this does beget the question : are the priorities correct?

What we are in effect saying is, Corporate India, Middle Classes can reap immediate benefit, while making no efforts to tackle the real problems beings faced by Rural India, like reducing middlemen, education, etc. This is a majority government, they can easily take hard decisions. And yet they are not doing so – as I had foretold much earlier. And that is what makes this budget completely unimpressive, and very UPA 3-ish.

My rating : 2 stars. As I expected….

Asia’s third-largest economy spends about 1 percent of its gross domestic product (GDP) on public health, compared with 3 percent in China and 8.3 percent in the United States. Indian states manage their health budgets separately. From : India keeps tight rein on public health spending in 2015-16 budget

6) HIGH DECIBEL PROGRAMMES WITH POOR FOLLOW-THROUGH

Swatch Bharat Abhiyaan and the Toilet Scheme are just two example that  have now been on for one year almost, and already shoddy implementation, and fanfare and media attention. Enough said; that said, like FP above, early days. Let us not criticize unduly!

7) ARROGANT AND UGLY UTTERANCES AT ALL LEVELS
The most worrisome aspect. It is not acceptable for leaders of a nation to belittle the past leaders at every stage and platform with utterances that reek of sheer arrogance and bravado, like “Good Government after 10/60 years”; “Indians now feel proud”, and any number of other examples. These are statements we should be making – this is proof positive of a total lack of humility and sheer arrogance; it is also unacceptable – as it is beoynd debate that at least UPA-1 made many a good decision. Give credit where credit is due- which this Government doesnt. To top it all come the polarising and deeply offensive voices from people connected with the ruling party – I have heard more than a few. 


THIS IS NOT MY IDEA OF A GOOD GOVERNMENT… THE 7th POINT ALONE IS WHAT HAS DRIVEN ME COMPLETELY AWAY – note the capitalisation. I dont support a set of arrogant people, howsoever good may they be.  

Was the UPA better? I honestly dont have an answer. My recent studies have led me to a rather uncomfortable possibility that UPA-1 at least was a good Government, but to be honest, I need to study a lot more before I can make any such assertion!  

Modi Sarkar and The Farmer : The Achilles Heel

Published May 2, 2015 by vishalvkale

MODI SARKAR : THE ACHILLES HEEL

It has taken a long time to manifest itself, but at long last, we see a developing Achilles Heel in our famed Modi Sarkar; a sad development indeed, given that this is the best government we have had in the past several decades. The only good thing is that the Achilles Heel has manifested itself from a totally unexpected direction; not only that, it also holds serious potential of rekindling a genuine opposition on a national scale, which is a needed and vital component of a functioning democracy.

It has taken twin developments in two connected areas for the weakness to manifest itself : Farmers’ Suicides, and The Land Bill. Taken together, this has created a situation in which, if properly strategized, the opposition can rebuild itself, while simultaneously undermining the central government.

THE CONGRESS : AWAKENING
The sad part is that once again,  it is the Congress that has the opportunity to rise from the ashes. This is sad because it has yet again failed to democratize, and has placed its faith on Dynasty. I have nothing against Rahul Gandhi; he may be an excellent potential leader for all I know; then again, he might not. That is not relevant; what is relevant is the fact that The Congress does not have any leader it feels can connect with the people, despite having some good people on its roster.

Be that as it may, the  Congress has taken what seems to be the right step; change track from the all-too-familiar “communal politics” track to a far more sensible and development oriented focus : that of the farmer and their issues. This bodes well for our democracy, for our economy and for our society, as now there is a chance the real issues might get a much needed attention and focus.

The best way to tackle communalism is not to fan it; all the while building solid relationships within communities. A politically charged message has a polarizing impact, and if the community specific plank is being abandoned by all parties, this is a development worth celebrating. If all parties can abandon a community specific focus, the only way India can go is up and forward. Aag ko jitnaa tool doge, jitni hawaa doge, utni failegi.

And harping on the communal message, which was not making a connect with any definable voter base was always a suspect strategy. Besides, there has to be a provable base for such a strategy that can be directly traced back to your opposition; and this is clearly absent in the BJP.


THE BJP : SLEEPING!
The BJP, meanwhile, is basking in the glory of its rise to power, and ignoring these undercurrents, which might yet turn into a deluge. While it is doing excellent work in any number of areas, its approach and presentation to the people on these two issues is strange and more than a little disturbing, given the party’s admirable understanding of the pulse of India and the Indian people.

Please note my choice of words : in this article, I am taking no position on the Central Government’s Agricultural and Land Policies – that is the subject of another, research based and supported article/s that I shall take up a little later on the Agricultural challenges being faced by India. I am only analyzing the potential impact of the presentation in front of the people, and the angst among them.

It adheres to a top-down development ideology, counting on investment in infrastructure, amenities to drive rural upliftment and employment, while attempting to ensure good governance at all levels of Government. It has also taken a few good steps in the Agriculture sector {Analysed on my blog here : Union Budget Analysis}; these will require time to properly strategise and implement.

What is more pertinent that it has done little to meet head-on the anti-farmer label that is being leveled against it by some, beyond messages to the farming community by the PM. More and more parties and  groups are now coming into the open, calling its policies as pro-Urban India and anti-farmer. The most important aspect that the BJP seems to have forgotten is the population of India – the top 200 Urban Agglomerations account for only around 15.46% of population as per Census 2011

Thus, any message targeted at the rural community that is focused not on ideology, religion, regionalism but rather on their bread and butter is certain to get the attention of the people. That is a foregone conclusion; the needs of the stomach will take primacy; that is a primordial fear. The BJP is giving a message of development : how is this message being received by the population? Is it making a connect with the people?

THE HISTORY
For Urban India, it means investments, growth and jobs. What does it mean for Rural India? What have the prior experiences of Rural India been in this regard? It should mean the same for them : but is this the way it is being perceived in Rural India? Farmers stand to lose their lands; what will they get in return? Each piece of land further supports landless labourers, input vendors etc – we are talking of snatching an entire ecosystem.

What is the history, the prior experiences of the farming community in India? As This Article : Why Farmers Have Every Right to Feel Gypped explores in painful detail – there is a sad, almost terrifying history of governmental failure of monumental  proportions behind this rising tide of protests against the BJP Government with regard to the Agricultural Sector;  what is sad is that this Government has actually started a series of steps that drive some hope into the refurbishment of this sector in the budget, which makes this image of anti-farmer a real tragedy in itself.

And look at the third and recent case reported this month in The Times of India which makes you want to cry and laugh – both at the same time!
The gist of the case is: in 1998, the Railways acquired land from Mela Ram and Madan Lal to lay the Una-Amb track in Himachal Pradesh. As usual, the Railways adopted delaying tactics when it came to paying up. The farmers filed a case for enhanced compensation. After a fair amount of legal to-ing and fro-ing,  in 2013, the HP High Court directed the railways to pay the money within six weeks. “But the railways hasn’t deposited the amount until now”, the farmers’ advocate AK Saini said a few weeks ago. Typical.
So, on April 9, 2015, Mukesh Bansal, the additional district and sessions judge of Una ordered the attachment of the train if the railways failed to pay compensation to the two farmers!! The court said if Mela Ram and Madan Lal did not get Rs. 8.91 lakh and Rs. 26.53 lakh respectively, the train would be stopped at Una station at 5 am on April 16 and attached by it. The farmers were asked to select one out of four trains – and they selected The Delhi-Una Janshatabdi Express!


SUMMARY
My point is simple : the steps taken by the BJP Government have exposed a chink in their armoury, one that is now being exploited by the opposition. This is the Achilles Heel; their weakness. And there is nothing they can do about it; not over the short term. I have purposely taken an isolated case history above : the point is that there is a feeling of inadequacy and helplessness that is rooted in genuine truth and a terrifying history of crass incompetence on the part of successive central governments over the years.

And this atmosphere is giving rise to an opposition movement that is, for the first time in my memory {correct me if I am wrong}, focused on real issues that make a powerful connect with the target audience in Rural India as on solid whole. For the first time, we now have an issue-based discussion in Indian Politics, which is bringing this issue mainstream.

All it really requires to bring the BJP juggernaut to a grinding halt is a solid loss in a few upcoming state elections; were that to happen, coming on top of the shock in Delhi, things will get interesting, as the BJP will be forced to recalibrate and reassess its approach and its communication. Unless the BJP can get its house in order and connect with Rural India and its real issues in light of the historical experience and the on-ground realities and challenges in Rural India, they stand to lose ground…