Issue 59 Vol III, March 15, 2008

A N A L Y S I S

Goa: Another Eden lost?
Micky Sharma

Tourism has been the life line of Goa, ever since India rediscovered her. The New Year bash, the shacks, the rave parties and the never-ending fun caught the imagination of the tourists, domestic as well as foreign.

But of late, there has been a feeling that there is turmoil in paradise. There is growing unrest that Goa, like all other so called 'cosmopolitan' areas in this country, has caught itself in a web full of conflicts. These conflicts are of cultural, economic and at times of bare human nature. The murder of a 15-year-old British girl in the state shook up the administration from their self-imposed slumber. Scarlett Keeling was the victim of greed, lust or probably drugs. The answer might be oblivious, yet obvious.

There are no two ways about it that the police and the local administration have to accept the blame for incidents such as this, even as they try to say that she was under the influence of drugs, or alcohol or whatever else. The big question is that if she was just 15, how could she get access to alcohol? Let alone narcotics.

It is probably the worst kept secret that narcotics have been the driving force behind Goa's emergence as a tourist hot spot right from the 60s as the hippies came pouring in. The cheap alcohol, loose drugs, beautiful beaches and laid back locals are the perfect set up for anyone looking for a quick high.

And when the moolah comes flowing, the administration doesn't care about the drug menace that ensures these finances. People very well know why places like Manali have become such a big hit with foreign tourists. It’s not as if Manali is the most beautiful hill station India boasts of. Other high mountains are given a skip for the 'high' of the 'good quality' hashish available in the region.

It is a clear case of holding on to wrong priorities. The administration is fully justified in promoting Goa as a tourist destination, but will that be at the expense of the lives of youngsters who miss out on all the years of their life, just for those few moments of 'thrill' and 'excitement'? A UN report in 2006 had highlighted that Goa was also a hub for pedophiles. That adds to the already complex nature of the problem.

Goa has built itself an image for being a place where people can unwind after rattling through their urban routines. So does the ideal way to unwind mean you end up lying in a restroom, with your tongue between your teeth and your mind in a totally different tangent; high on cocaine, heroine, marijuana or even worse ecstasy or LSD?

As the Goa government receives some unpleasant queries on its ability to keep tabs on the easy access to narcotics through out the state, this also is the time we realise that it is a demand and supply relationship. Narcotics are fast catching up with the fast paced life we are so getting used to. The urban youth in particular, have picked up this menace and are hugely responsible why places like Goa have become infested with the drug menace. Before looking at the statistics of foreigners dying in Goa due to a drug overdose, we would be better of sorting our own back yard. The youth of today are ambitious, but probably a tad misled as well. Action needs to be taken, but after understanding the gamut of this problem and before Goa is lost to us just as Eden was; and once again the 'forbidden' fruits are at the centre of it all.

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Union Budget and Rural Poor: Inclusive Enough?
Sukhpal Singh

THIS budget is the last budget of the UPA government and comes at a time when Indian farmers (80% being small or marginal) are faced with a sustainability crisis. Declining farm productivity, rising costs, environmental degradation due to soil and water mining, and suicides due to the burden of crops failures and consequent high interest debt even in agriculturally grown states like Punjab. Agricultural production this year (2007-08) is expected to grow only at 2.6%, compared with 3.8% last year. In this background, the Union Budget 2008-09 offers some relief to the millions of suffering farmers. It waives all loans (including rescheduled) due against small land marginal farmers from banks and cooperative lending institutions   up to December 31, 2007.

This amount is estimated to be Rs. 50,000 crore across 3 crore farmers, thus, on an average, being a relief of almost Rs. 17, 000 per farmer. It also provides a waiver to other categories of farmers (semi-medium, medium and large) to the extent of 25% of outstanding dues (including rescheduled) if they pay up the 75% amount as One Time Settlement (OTS). This amount is estimated to be Rs. 10,000 crore across one crore farmers.  Besides, agricultural credit has been allocated Rs. 280,000 crore and interest subvention of Rs. 1600 crore has been provided for though rate of interest for crop loans remains unchanged at 7% against the expected and National  Commission on Farmers (NCF) recommended 4%. There is also allocation of Rs. 2642 for the co-operative credit structure for their revival which has suffered a market share loss during the last few years in terms of disbursements of loans to farmers.

Yet unfortunately, the reality that marginal and small farmers mostly borrow from non-institutional sources has been ignored and, therefore, most of the benefit will go to the upper segment of the small farmers and, mostly, in agriculturally grown states and regions. The recent data show that the share of small loans (up to Rs. 25000) declined from 35.2% of the total agricultural advances in 2000 to 13.35% of the total in 2006. Further, the share of small borrower accounts (Rs.25, 000) came down to 38% of the total accounts in 2004-05 compared to 62% in 1991-92. On the other hand, the share of bigger loans ( Rs. one crore) increased from 14% of the total to 30% of the total during the same period. Thus, it is clear that the really small farmers were already excluded from the institutional credit structure by 2006.

The budget provides Rs. 31,280 crore for Bharat Nirman which is up from Rs. 24603 crore last year. Most welcome is the focus on irrigation with allocation of Rs, 20,000 crore for AIBP which is almost double of that during last year (Rs. 11,000 crore). The creation of Irrigation and Water Resources Finance Corporation (IWRFC), as a company, is timely to focus attention on the resource and mobilize investments for the purpose as a special purpose vehicle. Rainfed area development programme is given Rs. 348 crore which is a meager amount given that 60% of the cultivated area is rain fed and there is National Rainfed Area Authority (NRAA) which needs support. Similarly, important scheme-micro irrigation- has been given a shoddy treatment with only Rs. 500 crore. If water resource depletion is a concern, then this kind of schemes deserved better attention.

So far as farmer’s production risk is concerned, it is sad that National Agricultural Insurance Scheme (NAIS)  has been provided only Rs. 644 crore and the weather based crop insurance only Rs. 50 crore.  But, it is important to note that in the past, NIAS has reached only 4% farmers with 43% of the crop insurance claims being in Gujarat alone, that too, in a few districts of Saurashtra, and 36% claims being in Groundnut crop in Gujarat as it had the highest Coefficient of Variation (54%) in yield.

On the crop diversification front which can again help reduce risk, allocating Rs. 1100 crore to the National Horticulture Mission (NHM) is a welcome step as are special funds for tea, cardamom, rubber, and coffee. Agro-industries has not got much except some customs duty relief for poultry and cattle feed in terms of reduction in duty on vitamin premixes, exemption of seed nurseries from income tax and seed and agricultural equipment being allowed the weighted deduction of 150% for any in-house R&D expenditure.

But, the marketing risk of the farmers has not been attended to in any way. The Finance Minister has not bothered to support diversification of the rural economy. Diversification of livelihoods/income sources along with information provision about new opportunities and health care, and reasonably priced production and consumption credit/loans, is one of the major factors in helping rural families get out of poverty. For diversification to happen, marketing and extension needs to be extended to new crops and products. Marketing needs serious improvement. Farmers still ‘throw or dispose off’ their produce in mandis not really sell it, not to mention of marketing.

Though contract farming is being seen as an effective way to promote market efficiency but it excludes, most of the time, small and marginal farmers who need state supported markets. Contract farming could have been given credit and extension support especially to rope in small producers. Even contract growers need efficient alternative markets to avoid exploitation from monopolist contracting agencies. Besides, more direct linkages between producers and markets or consuming points need to be created for mutual benefit of both. It was here that the institutional structures like the new generation co-operatives or producer companies under the Companies Act could have been targeted for support. There could have been support to these organisations or farmer groups for value addition and marketing activity. Of course, budgetary support cannot create these institutions but it can certainly support their initial spurt.

Many new measures like contract farming, organic farming, and bio-inputs, which are emerging mechanism and practice in Indian agriculture and promote better sustainability and viability and are relevant for small farmers, have not found even a mention in the budget. There is no incentive for organic farming and organic produce marketing though it is being promoted as a potential export option and in fact, does stand good market chance compared to the conventional products which face Sanitary and Phyto-Sanitary (SPS) and environmental barriers as shown by their recent export performance. The long-term solution to the farm sector problems is to promote technologies like organic and low cost farming to reduce the quantum of fertilizer consumed, and thus, the subsidy. The emerging initiatives like non-pesticide management of crops, bio fertilisers, bio pesticides, Integrated Pest Management (IPM), Integrated Crop Management (ICM), and soil management need to be supported.

Social Sector has been given average support with education budget going up by 20% and health by 15% compared with last year. The Sarva Siksha Abhiyan gets Rs, 13100 crore and Mid-day Meal Scheme (MMS) Rs. 8000 crore. The MMS has got an increase of almost 60% which is remarkable (last year it was allocated Rs. 4813 crore which was only 37% increase over the previous year). The MMS will be extended up to upper primary level in 3479 educationally backward blocks benefiting 2.5 crore children taking the total number of children under this scheme to 13.9 crore. But, SSA increase is nominal compared with last year (Rs. 10041 crore) Besides, Rs. 4554 crore are provided for secondary education. Additionally, Rs. 650 crore are provided for 6000 new model schools. There are also small allocations for specific projects like JNV, KGBV, NMMS, and NYK.

Employment generation gets a boost with NREGS being extended to all 596 rural districts with an allocation of Rs. 16,000 crore.  Another welcome move is an allocation of Rs. 1000 crore for a skill development agency as Non-Profit Organisation to train and retrain human resources in different sectors. Housing for the poor gets some additional subsidy and cheaper loans and PDS has been allocated Rs. 32667 with plans to introduce smart cards on a pilot basis.

The focus on health by a 15% increase is little compared with 34.8% increase last year. Rising health costs, along with social ceremonies of marriages and deaths, is one of the major reasons, besides the high interest private debt which is incurred for these family matters, for rural poor families falling into poverty. The increase in remuneration for anganwadi workers is a welcome step as is insurance of members of the women’s SHGs through LIC. Further, for the first time, insurance cover is being provided to one lakh landless households with Rs. 1000 crore.

On the whole, the budget still focuses on the better off sections of the urban and rural society with sprinkling of schemes for the poor here and there, and that is the political economy of the budget in India.

Writer is an Associate Professor, Indian Institute of Management (IIM), Ahmedabad (Gujarat).

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