“‘Curiouser and curiouser!’ cried Alice (she was so much surprised, that for the moment she quite forgot how to speak good English);”
That’s what I almost said when I read the statement of Ms Nirmala Sitharaman, the Finance Minister (FM), that she will draft a Budget “which is a Budget like never before”. It is also what many people said when they read the names of the four members of the Committee (all pro-farm laws) appointed by the Supreme Court to hold discussions with everyone concerned on the disputed laws.
This land, where we live, is becoming stranger and stranger by the day. Is it not strange that a democratically elected government will remain stubborn even as the protest by farmers in the bitter cold of Delhi enters its 55th day (when you read this column)? Is it not strange that the government will call the protesting farmers for talks even while its Ministers and party leaders, and the Attorney General, call them Khalistanis (meaning secessionists)?
Strange facts are tumbling out of the closet. Ms Anjali Bhardwaj, an enthusiastic Right to Information Act (RTI) activist, applied under the RTI to various departments of the government for information on the farm laws; in particular, on the ‘dates of all consultations to discuss the proposed laws’ and the ‘minutes of all such meetings/consultations’. Every CPIO (Central Public Information Officer) reported that “this CPIO does not hold any record in this matter” and tossed her questions to another department. Yet, the government in its affidavit before the Supreme Court swore that the affidavit was being filed “for the purpose of dispelling the erroneous notion that the protesters have peddled that the Central government and Parliament never had any consultative process or examination of any issues…..”. Note the words “protesters have peddled” spat out contemptuously in a solemn affidavit.
After newspapers exposed the ‘nil’ RTI response, the Ministry of Agriculture hurriedly ‘clarified’ that the information could not be given because the matter was sub judice in several courts! As Alice would say, it gets ‘curiouser and curiouser’.
The fact is that there was no consultation on the proposed farm Bills with the farmers or agricultural economists before the ordinances were promulgated on June 5, 2020.
Besides, the Bills were passed by so-called voice votes brushing aside demands for a full discussion (or a reference to a Parliamentary Select Committee) and voting by division. A large section of the farmers do not want the offending laws. They point to Bihar where the Nitish Kumar-led government removed the APMC Act a few years ago. The result: the Bihar farmer sells paddy at Rs 800 per quintal while the MSP is Rs 1,850.
The farmers want the laws to be repealed, the government justified the laws and asked the farmers’ representatives to discuss the Acts clause-by-clause! Please notice the irony: the government that rammed the Bills through the Rajya Sabha without a clause-by-clause discussion or vote should offer a clause-by-clause discussion on the streets of Singhu!
Must do, but won’t
Meanwhile, we have the intriguing announcement of the FM. What she must do is very different from what she can or will do. Every economist of repute is agreed that many things ought to have been done in 2020-21, but were not done out of fear or timidity or a lack of knowledge:
# Cash transfers to the poorest families were not done;
# Indirect Tax rates, especially GST rates, were not cut;
# Government capital expenditure was not stepped up;
# MSME rescue plan was not formulated to save the enterprises and jobs.
Many economists — among them Dr Arvind Panagariya, Dr C Rangarajan and Dr Jahangir Aziz — have reiterated that these measures should be taken at least now to revive growth. Recall that the GDP, at constant prices in the three years preceding the pandemic was 2017-18: 131.75; 2018-19: 139.81; and 2019-20: 145.65 lakh crore rupees. According to the First Advanced Estimates, the GDP in 2020-21 will be Rs 134.40 lakh crore. That means, just to return to the GDP level of 2019-20, the economy has to grow at 8.37 per cent in 2021-22. A growth rate of anything less will mean that the economy that will lose Rs 11 lakh crore (at constant prices) in 2020-21 will suffer a further loss in 2021-22. At current prices, which will be better understood by lay people, the loss in 2020-21 will be Rs 9 lakh crore (USD 120 billion).
What can the FM do to push the growth rate to 8.37 per cent in 2021-22? With revenues under stress (because not enough was done to stem the rate of decline), I doubt if she will make cash transfers or cut tax rates. She could step up total government expenditure and (1) implement a rescue plan for MSMEs and (2) invest more in infrastructure. On the other hand, there will be more strident claims for increase in (3) Defence expenditure and (4) Health infrastructure. Something has to give, and I fear it will be the MSME rescue plan and health infrastructure.
The FM is right if her statement had alluded to the context of Budget 2021-22. In terms of content, however, I just hope she does not disappoint the people as she has done during the pandemic year.
(The Oxford English Dictionary says ‘curiouser and curiouser’ means ‘more confounded’)