Wednesday, February 27, 2008

Outlay or outcome, what is important?


“Bharat Nirman will be a time-bound business plan for action in rural infrastructure for the next four years.”
- Dr Manmohan Singh, PM, India

The idea of Bharat Nirman in the earlier Budget 2005 , is trying to attack rural poverty by giving them employment and stability through rural infrastructure and irrigation. The National Rural Employment Guarantee Scheme, which consolidates the ongoing food for work programs, is perhaps the single biggest government outlay, amounting to roughly Rs 11,000 crore to the ailing rural areas.


Statistics of rural suicides in different States reveal an aggregate of 312 suicides everyday, or roughly one every 30 minutes.

What is important?

The problems of the farmers were quite comprehensive. There was little credit available. What was available was very costly. There was no advice on how best to conduct agriculture operations. Income through farming was not enough to meet even the minimum needs of a farming family. Support systems as if free health facilities from the government were virtually non-existent. The problems are multiplied with the international policies in Post WTO regime. Subsidized raw material coming from different countries, are adversely affecting the living standards of our farmer, by bringing their raw materials in competitive scenario.
Investments in agricultural R&D have the highest rates of return in terms of agricultural growth, but today the situation is that India hardly invests 0.5% of agricultural GDP into agriculture research. As a result, as much as almost 40% of vacancies for Scientists in the Agricultural Research System remain vacant and the growth impetus to agriculture seems to be waning. Agriculture research needs more resources and commensurate institutional reforms, if it has to be a catalyst for making our agriculture globally competitive.

Similarly, irrigation projects have lingered for years without completion due to paucity of resources. The additional irrigation created has always lagged behind the targets in recent years by as much as 40-50%. The management of irrigation systems and the pricing of water (and power for irrigation) is in such a sorry state of affairs and it appears to be a huge waste of resources.

The Finance Minster himself has acknowledged this in his Budget speech, but has not offered any solution. Without fixing this problem, I am afraid, just pouring in more money in outlay, will not be sufficient. It may simply disappear as water disappears in sand and there would be no substantial outcome.