The drought is a moment of gr-eat human misery, but it should be faced with equanimity and balance. It is only if the facts are recognised that the real issues can be addressed. The first point that needs to be understood is that the hype that drou-ghts lead to a collapse of the Indian economy, is a reverting back to the logic of the geography books of an earlier era. It is simply untrue. The Indian economy is no longer a “gamble in the monsoon”.
Since 1975/76, the year from which the Indian economy has moved over to a higher growth path, drought years have not been years of low growth.In my L.K. Jha Memorial Lecture in 1996 I demonstrated that in the fifties, sixties and early seventies, the economy used to gyrate with the monsoons and in a decade we would have five years of gr-owth above 5 per cent, in the remaining five it was less than 3 per cent and could be as low as minus 5 per cent. Since 1975, we have only had four years of growth less than 3 per cent and the economy is not only growing faster, 5 to 6 per cent annually rather than the 3.4 per cent earlier, it is growing in a more stable manner.All this really means that we have the capacity to fight a drought, in terms of the depth and maturity of the Indian economy and a bad monsoon is no excuse to sidestep the reform process. Media wailing on the macro-effects of the drought needs to be ignored. Also the real issues in the drought are that there are pockets of immense misery and that the country has the capability to bring redressal to people here.
Again some of the hype takes aw-ay the focus on the real issue. For example, we were to-ld that there is water in Panchmahals in Gujarat. Now water harvesting is a great thing and we have been involved with Sadgu-ru for almost a de-cade and have written about it in this column. But the agroclimatology of Panchmahals is very different from Radhanpur or Jamnagar.
In fact Kutch did not have a drought this year and neither was the problem serious in the areas served by the Rajasthan Canal, including its recent extensions. In the areas which have been hit, the problem is severe. Cattle have migrated or died and drinking water is not easily available. Some persons are most certainly dying of diseases associated with bad or inadequate water. If we isolate the problem, we can fight it. The concerned states have been demanding around Rs 600 crore each and they have got a little more than a hundred crore. The real requirements are probably somewhere in between.
The first thing to recognise is that not only is the Indian economy as a whole less dependent on the monsoon, a drou-ght plan need not have short run adverse effects. The release of grains in the economy has a deflationary effect and reduces the deficit. Grain is released in three wa-ys. A small amount can, under the fa-mine codes, be gi-ven free to women-headed households or disabled persons. But a large amount can be released at cheap prices under food for work programmes and more in the open market at higher prices as food prices rise. These two categories could lead to a reflow of around six hundred crore, into the treasury. It is this money which should be anticipated and a viable anti-drought strategy planned and implemented.
The Reserve Bank in its recent pronouncements has noted the drought after Para 30 and at the end talked about giving loans to farmers for production and of relaxing the recovery period, but the need to finance a programme of drought proofing works, to turn adversity to advantage, is not to be seen.In the affected areas, advance planning is required. Works like water saving investments, deepening ponds, improving water storage, completing lower level conveyance systems are all necessary and some will save water very soon. These need to be financed on a large scale. The finance policy makers must not use the drought to solve their fiscal problem. That should be done by other means. The reflow of grain money should be used to drought proof. This by itself as a stand alone proposition will not be inflationary. That is the grain of truth.
It can be argued that all this should have been thought of earlier and any way now the next monsoon is on its way in a few weeks. This is to an extent true, although we do know that it is the second drought which shakes us up more, when they come in a row. The official monsoon forecast is as yet not out, but it wouldn’t hurt us to plan in advance. Better to be safe than sorry. I wouldn’t have used up one of my columns on a self evident proposition but everybody is so busy with everything else, that I thought I would put in my bit. One gets scared when a major newspaper and an agricultural trade specialist, argue that the only way to fight the drought is to raise water prices. Now, I am all in favour of reform of the economics of irrigation, but you have to be very Marie Antoinette to tell the people of Barmer and Radhanpur, that if they don’t have water they can buy Bisleri. This is also the time to use science to help the people. It is after all through the application of science that water-saving crops,water-saving technologies and rural health programmes can become a reality in the regions that need them.