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Does the Prime Minister Narendra Modi’s announcement on repealing all three farm reform laws with a profound apology to the farmers would pose a setback to the Central Government’s subsequent reforms? In India, where a large number of farmers are either small or marginal, what the nation needed was breathing time to allow farms to consolidate and provide the rest of the economy adequate time to generate employment to absorb excess farm labour.  Interestingly, the Prime Minister chose the birthday of Guru Gobind Singh to make his announcement. Does that look like a tactical retreat or a meek surrender and could there be any snowballing effect on his decision, politically, as well as economically?

In a surprise move, similar to the announcement of demonetisation earlier, the Prime Minister informed that the government would repeal the farm laws in the Winter Session of Parliament. He, however, conceded with a chocked emotion that though the laws were passed with good intentions to improve the prospects of the farmers, especially the underprivileged sections, his government, unfortunately, could not impress upon them its viable impact in the long-run. The Prime Minister was undoubtedly disappointed with the negative response from the farmers, in spite of his promise to constitute a committee comprising representatives of the Union and State governments, agriculture experts and scientists to offer an attractive package for farmers. 

The Prime Minister does not usually back off when confronted with different political challenges, but on this issue, he has succumbed to the pressure tactics of the farmers unions and a section of rich farmers aided by some oppositition parties to bully the government, and, more so, when the Centre wanted to make the role of the brokers and middlemen irrelevant in farmers negotiation with the merchants for a reasonable price to their products, besides rendering natural justice to their basic demands. Will Modi’s image as a tough task master when it comes to future implementation of reforms comes to a grinding halt, as the Prime Minister while conceded his defeat admitted that he could not convince a section of the farmers, who were adamant in their stance?

It is crystal clear that a determined group of vested interests can derail any reform, says the renowned journalist Kalai here. Democracy’s shortcoming is that the voices of the vocal minority almost always trump the interests of the silent majority. Moreover, farm reforms have probably been set back by more than a decade and the expectation is veering around fiscally ruinous sops, loan waivers and freebies, which the political parties would gleefully offer to further their vote-bank politics. Little wonder, the opposition parties were all at sea when the BJP government at the Centre has been implementing array of reforms after the party captured power in 2014. For instance, the government has succeeded with its other major reforms without a crisis threatening it.

One can only hope that the moderate labour and other reforms that are already legislated will not face the kind of opposition the farm laws did. The government is aware that it cannot subsidise forever such a large section of the population, based on taxes realised from a tiny minority of citizens. If cash payments and subsidised power, diesel, seeds, fertilizer, insurance and credit cannot make small and marginal farmers viable, making minimum support prices (MSPs) available for all farm produce is not going to achieve any better results. At best, rich farmers will end up being richer till the nation realises it cannot afford this munificence, view some political analysts.

Incidentally, higher MSPs and more subsidies will again misdirect investments in farming. It will ensure that water scarce regions like Punjab will continue with ruinous rice farming, and excess use of fertilisers will make land quality power. It is grossly unfair to expect that an economy now recovering from Covid-19 pandemic situation is being asked to retrieve agriculture from dire-distress without providing adequate safeguard to it. For example, food prices are already on the rise, and any further concessions on MSP would take a toll on the government, asserted some officials connected with the agriculture scenario. They also wanted to stress that the farm unions are making a difficult recovery more difficult.

Naturally, speculation started gaining ground that the sudden decision was taken, keeping the assembly elections to seven states next year, although the Gujarat and Himachal Pradesh polls would take place only by the end of 2022. The well-known political analyst, P.V. Sriram, says the Prime Minister’s decision on farm laws would have no bearing on the coming assembly elections, as an opinion poll conducted by some media houses a few months ago, have predicted the victory of BJP in Uttar Pradesh, Manipur, Goa and Uttarakhand in a close contest, although they ruled out its possibility in Punjab some time ago. However, a political survey on U.P. indicates that Samajwadi Party is inching on a neck-to-neck race with the BJP, compared to the situation a year ago when the latter was far ahead of the former in the opinion poll. The anxiety to retain UP at any cost could have also prompted the Prime Minister to avert the farm issue for the time being.   

Grapevines in the political circle reveal that the reason behind the Prime Minister’s decision on the repeal of Farm Laws was the involvement of some terrorists associated with Khalistan and the forces inimical to India when the anti-Indian slogans were raised during the protest movement and agitations resorted by the farmers on the sensitive issue. 

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