Farm loan waiver may spark off flurry of me-too announcements

Farm loan waiver may spark off flurry of me-too announcements
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First Published: Mon, Mar 03 2008. 12 02 AM IST

Largesse pressure: The Congress-led United Progressive Alliance’s decision to waive Rs60,000 crore of loans owed by farmers has, for the moment, left other political parties stumped.
Largesse pressure: The Congress-led United Progressive Alliance’s decision to waive Rs60,000 crore of loans owed by farmers has, for the moment, left other political parties stumped.
Updated: Mon, Mar 03 2008. 12 02 AM IST
New Delhi: The government’s decision to waive Rs60,000 crore of loans owed by farmers, it is feared, may trigger a bout of competitive populism from other political parties as they seek to mitigate the loss of the political high ground in rural India ahead of elections to eight states and a general election, if it is advanced as widely expected.
Largesse pressure: The Congress-led United Progressive Alliance’s decision to waive Rs60,000 crore of loans owed by farmers has, for the moment, left other political parties stumped.
“Though farmers do need support from the government, this package is dubious in its design,” said Parth J. Shah, president of the Centre for Civil Society, a New Delhi-based think tank. “It will hardly help the farmers who are at the bottom of the ladder, as they mostly borrow from private moneylenders, and it will only further feed into competitive populism of the kind that we have seen over power tariffs in Punjab and Haryana and over subsidized rice in Tamil Nadu and Andhra Pradesh.”
In a similar vein, Anil Basu, a Communist Party of India (Marxist) member of the Lok Sabha from Arambagh in West Bengal, said, “Some states due for assembly elections by November will be tempted to take the same path and announce schemes that target large sections of the population.”
While successive governments in Punjab have found it politically unviable to do away with free power to farmers, the Haryana government subsidizes power at 25 paise per unit and has set aside Rs2,800 crore, the highest sum for any state in 2008-09, for power subsidy to the farm sector.
Similarly, subsidizing rice at Rs2 per kg for poor families has been a recurring electoral theme in Andhra Pradesh since 1983, when then Telugu Desam Party leader N.T. Rama Rao used it effectively to come to power. When the Dravida Munnettra Kazhagam announced a similar scheme in Tamil Nadu two years ago, the J. Jayalalithaa-led All India Anna Dravida Munnetra Kazhagam responded with an offer of 10kg free rice.
For the moment, other political parties have been left stunned by the Congress-led United Progressive Alliance’s move. “The Congress party has clearly stolen a march over the Opposition, and even more so over the Left parties, which will find it truly difficult to match the impact of the sops announced in the Budget,” said historian and commentator Ramachandra Guha.
While most parties outside the ruling coalition have run down the debt-relief package, the Mayawati-led Bahujan Samaj Party (BSP) appears most concerned by the higher allocation for scheduled castes (SCs) and scheduled tribes (STs), who form the bulk of its vote-bank. “Extra allocations for SCs and STs will not affect our voter base or force us to change our electoral strategy,” claimed Ambeth Rajan, a Rajya Sabha member of the BSP.
“Without going into the economic merits of the allocations, the Budget is such an astute political package that the Opposition will do well to not get caught in the terms set by the Congress,” cautioned Guha. “It is quite different to claim in a manifesto that we shall do this and that if we come to power, as the Opposition can best do if it were to compete on these terms, and to actually implement the sops as the Congress is now in a position to do.”
The Bharatiya Janata Party (BJP) put a brave face to it. Yashwant Sinha, a Rajya Sabha member and a former finance minister, said the BJP had little reason to be perturbed. “It is difficult to say how the aam aadmi (common man) will benefit from this Budget, but it is certain that the aam aadmi will continue to bear the brunt of high prices of essential commodities,” he said.
Meanwhile, Asaduddin Owaisi, a Lok Sabha member of the All India Majlis-e-Ittehadul Muslimeen from Hyderabad, said other political parties would be forced to match up to the Budget announcements in some way or the other.
All of which points to a flurry of me-too announcements in the run-up to the elections.
ashish.s@livemint.com
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First Published: Mon, Mar 03 2008. 12 02 AM IST