ECONOMY

Monthly Archives: JUNE 2017


INDEBTEDNESS SURVEY REVEALS TICKING-BOMB SITUATION
16.06.17 -
INDEBTEDNESS SURVEY REVEALS TICKING-BOMB SITUATION



Punjab's rural sector deep in debt trap; 1/3rd of marginal farmers under BPL; 86% farmers, 80% labourers in debt 

A Special Report by PT Agriculture Correspondent

CHANDIGARH: About 86% of Punjab's farming families and slightly more than 80% of the state's agriculture labour families are under debt, a new survey of rural indebtedness has revealed.
 
The first-ever survey about farm indebtedness in Punjab that covers agricultural labourers, unlike earlier studies that left out farm labour, has shown that large landholding farmers spend more than six times than marginal farmers and more than 12 times than agricultural labourers on durables, non-durables, services and socio-religious ceremonies.

Shattering the myth about Punjab's prosperous farmers, the survey said 32.60 per cent of marginal farm-size category households in rural Punjab live below the poverty line when seen on the basis of consumption expenditure. While 14.65 percent of small and 6.25 percent of semi-medium farm-size households were also under the BPL, at least 2.27 percent of even medium farm-size households shared the same fate.

Also, while consumption pattern in case of marginal, small, semi-medium and medium farm-size families remains of a subsistence nature, with maximum money being spent on non-durables, farmers owning large tracts of land spent the most on durable items, followed by socio-religious ceremonies, non-durables and services.

Depicting a picture of shocking skew in incomes, expenditure, consumption patterns and on many other counts, the field survey entitled,"Indebtedness Among Farmers and Agricultural Labourers,” is the third such exhaustive study in the domain in Punjab. 

The first two broadspectrum surveys, one by Prof HS Shergill and the second by Dr Sukhpal Singh of Punjab Agricultural University, had not covered the farm labourers demographic. The latest survey, published in a book form by Germany's Lambert Academic Publishing, was released here by a farmer and a farm labourer in the presence of renowned economist, Prof Gian Singh of Punjabi University, Patiala. 
 
Carried out by Dr Gian Singh, Dr Anupama, Dr Rupinder Kaur, Dr Sukhvir Kaur (all from Department of Economics at Punjabi University) and Dr Gurinder Kaur, a professor at the Department of Geography at the same university, the survey underlines that while borrowing is a common phenomenon in the world, Punjab's farmers are singularly "unable to return the amount of debt out of their meagre income."
 
In turn, this "cancerous, self-perpetuating, malignant and maleficent" indebtedness abates agricultural production," affects social psyche, "aggravates inequalities," "arrests social progress and misdirects social efforts," the survey covering the period of 2014-15, said.

Coming at a time when Punjab is in the throes of a robust debate in rural indebtedness and when the political rhetoric over a possible farm debt waiver is up by many decibels, the survey is likely to underline the pitiable state of farm labourers, a section that had been hitherto ignored by many farm economists.
The survey covered 1,007 farm households and 301 agricultural labour households in Mansa, Ludhiana and Hoshiarpur – from Punjab's South-West, Central Plains, and Shivalik Foothills regions, respectively –  also brings out the fact that there are "considerable variations in the levels of poverty among the different farm-size categories and agricultural labourers across (various) regions (of Punjab)."

Also, the survey found that a large majority of farm labourers in Punjab – a shocking 80.07 percent – are living below the poverty line, and attributed it to "lack of employment opportunities and immobility of labour." 

While average annual income of a farmer family is Rs 2.92 lakh – ranging from Rs 12.03 lakh for large farm-size owner farmer's family to Rs 1.39 lakh for marginal farmer's family – an average agriculture labourer's family earns a mere Rs 81,452 in a year, with more than 90 percent of it coming from hiring out labour in agriculture. 

On an average, the survey showed, a farming household in rural Punjab is burdened under a debt of Rs 4.74 lakh (Rs 5.52 lakh on an average if only indebted sampled families are taken into account). An average farm labourer’s household reels under a debt of Rs 54,709, the study brought out.

About 75.27 percent of the farmers' debt is owed to institutional agencies, the remaining 24.73 percent incurred from non-institutional sources, such as commission agents, money-lenders, traders and shopkeepers, large farmers, and relatives and friends. 
An average farm household owes 57 percent of the debt to commercial banks.

The survey also showed that marginal farmers have the highest propensity to consume, and are likely to spend Rs 1,350 for every Rs 1,000 they earn. Small farmers spend Rs 1,290, semi-medium farmers Rs 1,100, medium farmers Rs 1,060 and large farmers Rs 940 against every Rs 1,000 they earn. Thus, farmers owning large tracts of land exceeding 15 acres remain just slightly above water, only underlining the persistent debt-trap like condition in which Punjab's farmers live.

Worse is the state of Punjab's agricultural labourers on this score. While the survey showed that an agricultural labour household consumes Rs 1,120 for ever Rs 1,000 it earns – an average consumption propensity of 1.12 in technical terms – the fact is that labourers actually end up suppressing consumption since loans are hard to come by and they have to struggle to maintain a minimum level of consumption by depending on loans that mostly come from non-institutional sources, tagged with high interest rates.

Thus, while an average farm household incurs an annual deficit of Rs 43,940, and average labourer household sinks under Rs 9,427 worth of annual deficit.

Marginal farmers are defined as those owning up to 2.5 acres of land while small farmers are those owning more than 2.5 acres and up to 5 acres, small-medium farmers more than 5 acres and up to 10 acres, medium farmers more than 10 acres and up to 15 acres and large farmers are those who own more than 15 acres of land. 

In revelations that may play into the ongoing political scenario in the context of cow-related politics, the survey said livestock assets were the "second most important productive asset of the rural household" after durable assets. Clearly, a more proactive cow-buffalo-beef-slaughter-cattle trade-gaubhagat-gaurakshak-gaushala-vigilante kind of politics may end up harming this key pillar of rural economy. Indications are that farmers are already feeling the heat of such trends in politics fanned by saffron brigade.

The latest survey is likely to further fan the debate about farm debt waiver, with Chief Minister Amarinder Singh under massive pressure to announce immediate relief in the ongoing budget session of the state Assembly, particularly in the backdrop of aggressive agitation of farmers in Madhya Pradesh, Maharashtra, Telangana and other regions.

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Bir Devinder slams expert group on farm waiver, wants one member to be removed
15.06.17 - Team PT
Bir Devinder slams expert group on farm waiver, wants one member to be removed



CHANDIGARH: Questioning the relevance and functioning of the Expert Group set up by the Amarinder Singh government to find ways and means for farm debt waiver, senior politician and former Deputy Speaker of Punjab Vidhan Sabha, BirDevinder Singh today said its term of two months came to an end today without any tangible, visible results.
 
"The ‘expert group’ was given 60 days to submit its report (and that time frame) stands expired today. I expected the experts to have completed their research and done thorough home work by now in view of the horrendously  compelling circumstances entailing unabated suicides of the hapless farmers," BirDevinder Singh.
 
He said it was a travesty of procedure that the ‘expert group’ was soliciting the views of the farmers' organizations even today (June 15), the last day of its tenure.
 
"Therefore, it seems certain that Punjab government is not going to announce any kind of complete ‘debt waiver’ in the current budget session of the state Assembly under the excuse that the report of the ‘Expert Group’ under the Chairmanship of Dr. T Haque is yet awaited," BirDevinder, a former Congressman, said.
 
Raising another controversial issue, BirDevinder said one of the members of the group, Dr. PK Joshi, "must immediately disassociate himself" from the exercise "for his biased and explicit opposition to the Punjab farmer’s debt waiver."
 
He said Dr Joshi, Director (South Asia) at the International Food Policy Research Institute (IFPRI) Delhi, "has already vehemently expressed his categorical opposition to the idea of debt waiver to Punjab farmers" in an article in a leading newspaper last month. 
 
 

Since Dr Joshi "is of the considered opinion that Punjab farmers would benefit more if the state government subsidized the adoption of appropriate technology and diversification of crops" and has an obdurate view about the need and efficacy of the debt waiver, there can be little hope of this "much hyped expert group." 

"Probity demands that Dr. PK Joshi must immediately disassociate himself" on his own, he stressed.

Also, he added, the state government was sitting on empty coffers and will resort to Machiavellian mechanisms to delay the matter inordinately. "It may constitute another ‘Review Committee’ of some renowned economists to further examine the financial feasibility of the report of the ‘Expert Group’ if at all submitted, in the near future," he said.
 
Photo caption -- Members of the Expert Group at Kisan Bhawan today where they met leaders of various farmers' unions.




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Farmer Unrest: An Environmental View
12.06.17 - PT Editorial
Farmer Unrest: An Environmental View



With the farmers' unrest in Maharashtra and Madhya Pradesh grabbing headlines and prime time television's attention, it is easy to forget that we are talking of a serious environmental crisis on our hands. The townsquare, as adjudged from newspaper headlines and op-ed pages or 8pm to 10 pm TV debates, sees it as a crisis of agriculture, an issue of management of huge debt owed by farmers (like bad debts or NPAs of banks), or lack of political consensus on whether to waive off loans and who should fund it -- the state governments or the Centre?
 
Rare is the voice that presents it for what it is: a serious environmental crisis!
 
If our agriculture policies were designed to push for ecologically sustainable farming, then pricing mechanisms would also have been different, and farm income figures would not have pushed farmers into committing suicides.
 
It is a pity that when governments from Punjab to Uttar Pradesh to Maharashtra to Madhya Pradesh to Odisha, Telangana and Tamilnadu are grappling with a full blown crisis in their villages, worried that it is coming knocking at the doors of the cities, they are still not calling it by its real name: an environmental disaster.
 
Saner political analysis worldwide clearly defines the mass movements of migrants from Syria and other war-torn countries as a crisis resulting from environmental mismanagement, even when it seemingly feels like something triggered by wars and hardcore real politics between superpowers.
 
It is clear that not many in the decision making chain are interested in saving our planet - though they must have sworn to do so in their school essays - but surely they are interested in ensuring that mobs of desperate farmers do not spill out on the streets. They key to that is to view what is happening in our fields through the prism of environment.
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Rare is the voice that presents it for what it is: a serious environmental crisis!
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A better approach towards environment would have ensured a different approach towards notions of development. Also, it would have ensured that farm incomes do not nosedive to a level of Rs 1,600 per month median level, as enunciated this month by the Government of India's Chief Economic Advisor Arvind Subramanian. It would have ensured that local decision making, and a robust process of Gram Sabha meetings in India's villages where local people are always better informed and more skilled in aligning their needs and priorities with environmental concerns.
 
Loan waivers are required, but are not a panacea. Re-imagining agriculture, re-orienting farm policies, changing the mandate of research in India’s agricultural universities and institutes, and giving primacy to devolution of power and funds to the villages have to be part of any multi-pronged strategy to ensure crowds of angry farmers do not come converging on cities like Mumbai or Delhi, or that forces like Bhim Army do not send a calling card to the regime.
 
As farmers in Punjab plan to launch what they will inevitably term as "massive struggle” next month, and sundry factions of Bharti Kisan Union issue press releases to show solidarity with farmers in Maharashtra and Madhya Pradesh, they need to use a mirror, too. How much effort have these farmer leaders made to ensure regular holding of Gram Sabhas in Punjab villages?
 
Farmer leaders’ silence makes them, alongside politicians of all hue, a party to the systematic disempowerment of villagers even when a steelframe structure for empowerment is offered by the Constitution’s 73rd and 74th amendment.
 
Maharashtra exploded this month, but only after the people of one village, Puntamba, located along the banks of the Godavari in Ahmednagar district’s Rahata taluka, decided they will not supply milk to the local contractors who were not paying the right price. Soon, other villages joined in. Before you can say Devendra Fadnavis, western Maharashtra was in the throes of ryots’ agitation. Announcements of loan waivers came thick and fast.
 
Other things apart, it proves the power of the gram sabha. It is time Punjab’s farm leadership realises that. The key to empowering the rural economy and pressurising governments into re-imagining rural development lies in the institution of Gram Sabha, a debate that is still not making it to prime time television.  




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Don’t deal in cash if amount is Rs 2 lakh or more, warns Income Tax
03.06.17 - team pt
Don’t deal in cash if amount is Rs 2 lakh or more, warns Income Tax



DO NOT transact in cash if amount is Rs 2 lakh or more otherwise receiver of the amount will have to cough up an equal amount as penalty, warned the Income Tax on Friday.
 
It also advised people having knowledge of such dealings to tip-off the tax department by sending an email to 'blackmoneyinfo@incometax.gov.in'.
 
The government has banned cash transactions of Rs 2 lakh or more from April 1, 2017, through the Finance Act 2017.
 
The newly inserted section 269ST in the Income Tax Act bans such cash dealings on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.
 
"Contravention of Section 269ST would entail levy of 100 per cent penalty on receiver of the amount," the tax department said in a public advertisement in leading dailies.
 
In the 2017-18 budget, finance minister Arun Jaitley had proposed to ban cash transaction of over Rs 3 lakh. This limit was lowered to Rs 2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.
 
The restriction is not applicable to any receipt by government, banking company, post office savings bank or co- operative bank, the tax department said.
 
The move to ban cash transaction above a threshold was aimed at curbing black money by discouraging cash transaction and promoting digital economy.
 
The tax department had started the email address 'blackmoneyinfo@incometax.gov.in' in December last year post the demonetisation of 500 and 1000 rupee notes.
 
It had then asked people having knowledge about conversion of black money into black/white to inform the government through this mail id.
 
Post the demonetisation of 500 and 1,000 rupee notes, people with unaccounted wealth had illegally converted their black money held in old notes to new 500 and 2,000 rupee notes.




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