Kamal Morarka

Agrarian distress: Loan waiver is not the answer

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Agrarian-distressThis week the newspapers were full of prime minister’s visit to the US. For India, the US is an important country and prime minister visiting them is important. Unfortunately, contents of the discussions etc. are not known. As always it is a good idea for a prime minister to call on the new president of the US, because India has got many matters of concern, especially regarding the US attitude towards terrorism, towards H1B visas, etc. etc. Between the lines one can see that on H1B visa there has not been much progress, and I don’t think India should press this matter, because India is not a country which is dependent on their H1B visas. They need Indian technical hands as much as we need the jobs. One should go slow on that. On terrorism, the plus point is that they have declared one man as a terrorist which a signal that the tilt is not towards Pakistan. I will not say that the tilt is towards India or against Pakistan; it is only a small reminder to Pakistan that “listen we cannot take all this forever.” In Pakistan one should get the message and even the Kashmiri angry young men who look to Pakistan would also has a message that this is not on, international community does not favour this route of solution to any problem. Of course much have to be done on our governmental front, diplomatic front, negotiation front, political front. These things take time, let us wait and see.

The second major decision they have taken is Air India disinvestment. Now in the absence of the details one cannot comment whether it is a good decision or a bad one. First of all the merger of Indian Airlines and Air India was done by the UPA – one or two, I don’t remember – but it was ill-advice decision. Air India was an international airline which competed with Lufthansa, Swiss Air, British Airways, etc., while Indian Airlines was a monopoly airline in India till government allowed new private airlines to come in. Indian Airlines performance was not bad. Even after competition it stood its ground because of the sheer numbers of flights and the working culture. Air India faltered because it was overstaffed and International competition was too tough to take. Moreover, it was rumored that the UPA government allowed Air India to buy a lot of planes much beyond of their repaying capacity. Also the UPA government appears to have surrendered some routes to foreign airlines especially the Emirates. These decisions were very tricky. The government should be very careful that they should not take commercial decision which will adversely affect their own enterprises, but all that has been done. This government is now three years old what have they found. They don’t tell us. What does the Civil Aviation Ministry found out, they won’t tell us. Suddenly, they say the debt is so much, so we must sell. No! The correct figure which the public must know is what is the annual earning of Air India before interest depreciation and tax; it is called EBITDA (earnings before interest, taxes, depreciation and amortization). If that is positive that means you still making some money. Then what is required is capital restructuring. To say that Air India debt is 56 thousand crores. Debt to whom? It is government money. The way to look after an enterprise is whether it can make money. If EBITDA is negative then there is no hope.

Now comes the question of privatization. Who will buy it? Private sector is not government. They buy things to make only profit. It is foolish to say we will disinvest this. Who will buy it? Unless you are prepare to cut the debt substantially. So first you must make it the commercially viable enterprise, before you try to find buyers. Of course there are very intelligent people in the government. They must be applying their mind, but just announcing to the press that we are selling Air India, will demoralize the employees of Air India. It will have detrimental effect on the airlines without anything positive coming out of it. It is better to do their homework and come with some work plans. Then comes the question of cows.

The good point is that this NDA government is not different from the UPA as far as the country’s policies are concerned which is good, because we have done well in 70 years despite whatever the propaganda the BJP may do and they are not able to digress either. MGNREGS, Aadhaar, whatever UPA policies were, are being carried on. The only thing is cow. The cow needs a national policy. It is not proper. In fact agrarian distress is so much that even after giving loan waivers there are suicides, because agriculture farming has become unremunerative. Waiver is not the answer; answer is how to make them earn income. There comes an important point. Substantial numbers of farmers in country keep cows and buffalos and sell milk as a side income. When prices of crops are down the milk sale keeps them going for their day-to-day expenditure. It is an important element. Now this is link to the cow issue that is why I bring it up. Now the farmer says we use a cow and when the cow stops giving milk we sell it, naturally to slaughter houses, which kill it and export the beef. Now you have put restriction on that as it appears. The farmer would have sold it to a trader who would be offering him 10 to 20 thousand rupees. You are giving further stress to the farmer.

A holistic national policy should be understood, of course preferably there should be no policy of allowing cow to live forever. Human being dies, cow also will die. And in beef exporting India is one of the biggest countries. If it is not cow beef, it will be buffalo beef. But once you allow extra-legal authorities to interfere, somebody can stop a truck kill a person, lynch a person. Well, then we are going into a very dark area. The country will lose its image of being a law-abiding democracy, and then you expect America and western countries to do business with you and to help you, it’s a tall order. Either you are a third world, obscurantist, superstitious, religious country or you are a modern, scientific, forward-looking democracy that is the choice. And these people though they are supporters of Mr. Modi, I understand his predicament. The RSS and the VHP has long history, but even they have to evolve. The RSS today is not what it was 30 years ago I know it. I know the people I know it for the fact. The Vishwa Hindu Parishad had once made Ram Mandir the biggest issue. Can it do it today? No. The times change, things have to change. Government must set up a committee or must give it to Niti Ayog. Niti Ayog is there. Government should come out with a clear-cut policy on cows, milk and agrarian distress. I don’t think they have much to do, since planning commission work has ended. They can apply their mind and come forward with a solution which should be good for the country irrespective of whichever government comes. It does not make a difference in democracy one government comes and one government goes, it will go on but viable solution acceptable to all section of society should  be found. Let us hope.

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