Union finance minister P. Chidambaram has announced a Rs60,000 crore debt relief that is expected to benefit around 40 million farmers.
Chidambaram has clearly articulated the “intent” of the United Progressive Alliance (UPA) government to help small farmers by 30 June. The government has sent out a signal to farmers that it is their mai baap (beneficiaries) and is (genuinely?) interested in protecting their interests.
On going through the Budget documents, the first questions that came to mind were: Why hasn’t the government crunched the numbers before it made such a commitment? Is there any significance behind the 30 June deadline to write off farm loans? Here, I try to unravel the possible strategic plan of the UPA members who are in government (and not those supporting the government from outside), while constructing the language of this proposed debt relief package.
The US senators visited India before Budget 2008 clearly expressed displeasure at the delays in the political ratification of the Indo-US nuclear accord, within India.
While speaking to the press, senator Joseph Biden told press-persons, “It will be very difficult if we don’t get the deal before July-end. If it is not ratified by the US Congress by then, the deal will be renegotiated by a Democrat president.” Echoing the sentiment of senator Biden, John Kerry (US presidential candidate in 2004) is reported to have said the following: “This is an important moment for India. If we don’t get the IAEA (International Atomic Energy Agency) pact within weeks, it’s going to be physically difficult due to the congressional calendar to get the deal through.”
Both these senators have therefore said that if the Indian government does not deliver by the beginning of July, the deal will not see the light of the day.
The government seems to be trying to extract a political advantage for itself from this unique combination of a “deadline date and commitment date”.
The government may give a final deadline to the Left to extract its support for the Indo-US nuclear deal, latest by the end of May, so that the language on the same can be finalized by the end of June and sent to the US senate. In parallel, it will keep on working on a package for actual implementation of the debt relief package.
If the Left declines support to the government’s position on the Indo-US nuclear accord, the government may approach the President and demand dissolution of the Lok Sabha. The Congress and its allies in government have little to lose before their voters. On the one hand, they can effectively use their budgetary promise (for 2008-09) to tell the nation how the Left sacrificed the Indian farmers on their altar of anti-Americanism. To middle-class voters, they can say that the Left has sacrificed India’s energy security by giving ideology priority over national interest.
On the other hand, if the Left gives in, the Union government will have a package to roll out for the farmers by the beginning of July.
“Heads I win, tails you lose” is what the government seems to have achieved at this point of time.
Will this game backfire? Does the Left already have a strategy to tackle this Catch-22 situation? Is the farmer being used as a sacrificial object to extract the nuclear deal? Difficult to answer but worthwhile to think over.
Raghav Narsalay is an economist. Comment are welcome at email@example.com