Sunday, July 27, 2008

Two instruments by name Kalawati and Sasikala

One of the most discussed speeches in the debate on the trust motion in the Loksabha was Rahul Gandhi’s. Arguing that “energy security is directly related to poverty”, Rahul Gandhi pitched in for the deal in the name of two widows from suicide-stricken Vidarbha – Kalawati and Sasikala. According to him, the lesson from his Vidarbha rural ride was that Kalawati and Sasikala were poor because they were energy-insecure; their children could not study and become doctors, engineers or collectors as there was no electricity in the evenings. Coming from a man, known for his wholesome support for the deal and portrayed as India’s future Prime Minister, the speech was celebrated in most of India’s dailies. “Empower Kalawati with N-deal”, said the CNN-IBN. “The millions of Kalawatis in rural India must become part of a new politics of social-economic emancipation”, wrote the Economic Times.

In a sense, Rahul Gandhi’s speech was a classic cover-up operation that should have left his tour guides aghast. The current power crisis of Maharashtra – with regions outside the power-guzzling Mumbai subjected to a massive power cut – is a very direct outcome of the shady and disastrous Enron deal of the 1990s. It was the State’s Congress government that initiated talks with Enron and signed the MoU in 1992 and the PPA in 1993. It was the Narasimha Rao government at the centre in 1994 that signed the counter-guarantees with Enron. The MoU, PPA and the counter-guarantee were sold to India’s people in the name of “energy security” for Maharashtra. Much the same enchanting dreams that we were asked to see during the debate on the nuclear deal were told to us in the early-1990s also, when Left parties and progressive activists were opposing the Enron deal. The Shiv Sena-BJP combine that came to power in 1995 was equally guilty of getting “politically educated” and moving towards supporting the deal in the name of “renegotiations”. The Enron deal came crashing in the late-1990s, upsetting energy plans for the State – a shock from which Maharashtra still reels.

Kalawati’s lights were switched off primarily due to the Congress’s shady Enron deal. If only Rahul Gandhi’s advisors had given him a few lessons in history, he would not have committed that gaffe.

There is more. Rahul Gandhi’s comments did not just cover-up for the Enron fiasco. It was also a poor effort to sidestep the central role of the Congress party (as well as the Sena-BJP combine) in triggering the series of farmers’ suicides in rural Maharashtra. The agrarian distress in Maharashtra is largely a result of the crisis in its cotton economy. This crisis has many causes that have been repeatedly discussed. First, the crash in cotton prices adversely affected the economics of cotton cultivation, primarily because the government began to gradually weaken the ‘Monopoly Cotton Procurement Scheme’ from the late-1990s. Till the late-1990s, cotton was purchased from farmers by the Maharashtra State Cotton Growers Marketing Federation at an assured price, and then sold in the open market. The Congress’ remarkably ineffective Chief Minister Vilasrao Deshmukh went a step ahead in 2005 by withdrawing the promised ‘advance bonus’ of Rs 500 per quintal of cotton; this was one of the final nails in the cotton coffin. The withdrawal of the procurement scheme rendered cotton farmers, including Parashuram Bandurkar (the late husband of Kalawati), totally susceptible to volatilities in international and national prices.

Secondly, cheap imports of cotton have flooded the Indian market after the activation of the WTO agreement signed by the Congress (again, without the approval of India’s Parliament). Import duties on cotton were significantly lowered in 1997, resulting in a surge of imports and a fall in prices. Incidentally, 1997 was the year when the first reported suicide by a farmer took place in Vidarbha. The central government eliminated quantitative import restrictions for cotton, and reduced import tariffs from 35 percent in 2001-02 to 5 percent in 2002-03. Farmers like Parashuram Bandurkar faced growing competition from subsidized cotton grown in the West. Both the NDA and UPA governments at the centre have consistently refused to raise import tariffs for cotton and protect farmers from cheaper imports.

Thirdly, both the Congress and BJP governments at the centre and the State have presided over a period of breakdown of institutional support structures in rural areas from 1991 onwards. Input costs have exhibited a sharp rise after a reduction in subsidies. The rise in the input costs is reflected in the rising bills for electricity, fertilisers, energy (diesel) and transportation. Given the declining public investment in agricultural extension, farmers have lost access to the public extension that is supposed to give reliable information on how to deal with pests and declining productivity of land. In its place, the farmers are dependent on agents of seed, fertiliser and pesticide companies – a dependence that has attained disastrous dimensions in the suicide-stricken regions like Vidarbha.

To top it all, the Vidarbha Relief Package – conceived and implemented by Congress governments at the centre and the State – has been shown by the Maharashtra’s CAG report for 2006-07 to be a major failure.

The Indo-US nuclear deal is not an agreement with foreign policy implications alone. The strategic embrace with the US has important economic dimensions; a series of agreements have been signed between the two countries in fields like energy, agriculture, trade, investment and open sky policies. For instance, the Indo-US Knowledge Initiative in Agriculture (KIA) is a step towards the privatization of agricultural research in India. It has been noted that this agreement would weaken public sector research and promote private sector research on commercialized crops at the expense of food crops – an agenda identified by multinational corporations. The Board set up for the implementation of the KIA includes representatives of Wal-Mart and Monsanto. It was ironic that Rahul Gandhi chose to invoke the Vidarbha suicides to sponsor a policy shift that is likely to exacerbate the agrarian crisis in rural India.

In his speech, Rahul Gandhi seemed unperturbed by the damage the Congress-initiated economic reform had inflicted on Indian agriculture. In trivializing the discussion on poverty and farmers’ suicides, thereby trying to portray energy insecurity as the cause of poverty, he was doing a neat whitewash job of Congress’ bleak record in this sphere. Indeed, to this end, Kalawati and Sasikala were good instruments.


  1. Execellent analysis,it is sad that our media and people who consume it today have only eyes and ears for his 'attractive and humble demeanor' and the 'perceived sincerity and earnestness'. We have become a nation of idiots, who can be taken for a ride by anyone....

    As an agri activist I struggle to make people understand abt the KIA, which came in thru the back door and am faced with blank looks or that snort of, 'dont tell me that its bad for us'.


  2. Thanks for your very good work on this. Hope you'll do much more.

    Drop by

  3. Thanks, Devi and Yupfarming! We will take this forward...


  4. I must say that I have learnt a lot from this post. Hoping to read more and more of yours.