Professor Christophe Jaffrelot speaks with The Wire’s Mitali Mukherjee on why the COVID-19 crisis has become a double-edged sword for rural populations and their incomes. Jaffrelot is Professor of Political Science, Sciences Po, and senior research fellow at CERI-Sciences Po/CNRS.

He also speaks about the Reserve Bank of India’s optimism about increased agricultural output, his opinion on the relief measures provided by the Government of India so far, the global perception of India and more.

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Read the full transcript below.

There’s been so much conjecture around overall growth but I wanted to focus specifically on what’s playing out in rural India right now. You recently wrote a piece on how COVID has been a double-edged sword for the rural population. Why?

In fact, one of the main problems rural India will face and is already facing is the fact that most of the migrant labourer’s were sending back to their villages 1/3rd or half of what they were earning in the cities and this money will not be there anymore. On top of that, they will have to be fed by the families in the villages where they are back. So that is one major issue.

We must realise that most rural families depend on at least one family member being out of the village, whether it’s Mumbai, Ahmedabad, Surat or in the Gulf, out of India.

The other problem, of course, is the fact that the supply chains have been broken, it’s very difficult for peasants to sell their products because there is no market place working, there are no trucks, borders with neighbouring states are closed. So you can’t sell as easily as before your milk, vegetables etc. – they have to destroy some of these products and the waste is amazing, given the needs of the people.

So, these two things are badly affecting the people in villages of India and come at a time when agriculture is already facing challenges. In fact when you look at the growth rate of agriculture over the last few decades, you see a very steady erosion. The growth rate of agriculture has been continuously lagging behind industry and services. And that is a reflection of structural issues.

The growth rate of agriculture is affected by water problems and sub division of plots – 70% of India’s peasants are operating less than 1 hectare of land, and that is not sustainable. As a result, you have as many landless peasants as peasants with some land.

Last but not the least, the policies that the Government have implemented have proved counter – productive for rural India in at least 2 ways; NREGA has not been supported the way it used to be – the corpus for NREGA used to be 0.8% of GDP. 0.8% of GDP is now the total size of the relief package the Govt of India has announced ( so far).

On the other hand, farmers who have something to sell don’t have the minimum support prices (MSP) that had been promised to them. And when the prices increase, imports are brought in to keep food prices low. Prices of food have to be kept low for the urban consumers to be protected. It’s an ‘urban bias ’ that is affecting the kisans (farmers).

The present crisis is in fact intervening in a context where India’s agri sector is already in a difficult situation.

As you said, agricultural growth itself has been slipping over the years, in terms of its contribution to overall GDP. Interestingly in his recent press conference, the RBI governor alluded to the fact that agricultural output was at an all-time high, kharif sowing was expected to be very strong and that the RBI was feeling optimistic about the agricultural side. Do you share that optimism?

Well in terms of production, we have seen good crops over the last two years. After two years of drought, India has had two years of good crops. So the problem is not coming so much from a contextual matter, it’s coming from policies.

You may harvest a good crop, if you cannot sell it at a good price and at the right time you’re not a winner, you’re still a loser. And that’s why peasants are left to destroy their crop.

You remember in 2017 when there was an upsurge of peasants in Mandsaur, Madhya Pradesh, the crop had been great. So the point is not so much about the productivity, but about the price. How much do you sell and what price for your produce. That’s for the farmers. For those who have no land, they will not benefit tremendously from good crops if there are no jobs, like if NREGA budgets remain low, the crop may be great but they may not get major salaries anyway.

So these predictions are in fact a reflection of a trend we see increasingly in the Indian government – ‘Don’t rely on us, the Indian government, don’t expect much from the State.’ So work, cultivate, help yourself. But the State is not prepared or supposed to intervene tremendously in favour of the poor.

The second part that you pointed out, was how much remittances were adding to rural incomes. Would you have a sense of how much (in percentage terms) remittances contributed to total income, as also, which states are more vulnerable because of a halt in remittances into the rural pockets?

It’s very difficult, we have very little data. Paucity of data is increasingly becoming a problem particularly where migrant workers are concerned. The research scholar who has done the most investigation in this area is Tariq Taksheel and his field work shows that those who earn approximately Rs 5,000 send something like 1/3rd half of their earnings home. It’s a lot for them, it’s even more for those who receive the money.

In terms of location of course, we know which states need the money most – Bihar, Odisha, east UP, mostly these three regions. And that’s why you have so many people in camps in Gujarat and Maharashtra who lost their accommodation and are now housed in temporary shelters where they are stuck.

Not just are they facing an income problem, they seem to be facing an employment crisis. In my conversation with Mahesh Vyas of CMIE, he pointed out that alongside the 23% unemployment number, the problem seemed larger in rural India vs urban India, where there has usually been a higher unemployment tick. What do you think is feeding that?

We have an unemployment issue in urban India, more and more. The CMIE figures are terribly interesting – those who live in cities are affected more by joblessness and those are educated even more within that. If you look at the bracket of those between 25-29 years and are graduates, the unemployment rate is 37%. It is paradoxical to say the least.

For the unskilled workers, you may imagine that there are two problems; one is industrialisation has not taken off. India has not been able to industrialise itself. The GDP data shows that agriculture is eroding, while industry is not increasing. We are still with 17% contribution.

By the way, ‘Make in India’ does not seem to have delivered, at least we do not see the contribution in these figures.

The second explanation may come from automation. It’s very surprising to see, in spite of the low cost of manpower in India, that industrialists resort to robotics to such an extent. If you visit a factory making cars, you see how few people you need to make it work.

That’s a disturbing development and can be attributed to education. You cannot transform peasants into factory workers without some form of education. It is a different world, you need to have different forms of discipline.

It can also be explained by labour laws – one could argue that it’s easier to dispose of machines than people in places where unions are strong. But that is less convincing an argument.

But if you can’t give jobs to young people coming from the countryside (except in the informal sector), then indeed there will be deep trouble because the demographics are not working for India. You still have 16 million people more every year. Jobs have to be created.

What have you made of the relief measures announced so fear. There is a concern that it has bypassed many pockets, like tenant farmers, NREGA schemes at this point are at a standstill. Does it provide the require relief?

There are two problems there – you have the quantity problem, it’s very limited. As I said, 0.8% of GDP is not much more than what NREGA was under Manmohan Singh. It’s much lower than other countries where you go beyond 10% of GDP, in some cases 15%.

I think that’s a reflection of two issues – the first is that the State is not supposed to do the job, society is supposed to take care of itself. This is a philosophy, an ideology.

When Narendra Modi invites rich families to take care of poor families, he’s not saying anything different. Do the job yourself. The state is not there for that, the state is the danda (stick). The state is there for policing, with the help of vigilantes. But the state is not there for welfare. And the ‘welfare state’ is minimal. When you spend 1.2% of your GDP on health, you do not invest in welfare state.

So you can justify the limited quantity you inject in a relief package in somewhat ideological terms.

But you can also more clearly justify this by saying there is no money – and there is no money because the state is poor indeed. If you look at the real fiscal deficit, not the purported 4.5%, it would stand at 10%, including Centre, state and PSUs. The real fiscal deficit is huge.

So how do you spend more, when you have already lost the plot in terms of fiscal discipline? The only way is to go into heavy debt. India doesn’t have a very bad debt to GDP ratio. The loans should not be in foreign currency, because of how low the rupee is. But in addition to that, India may need to go back to the international lenders like IMF, World Bank (from whom India has already borrowed $1 million).

In that sense what this crisis is revealing, is that India is back to the image it tried to avoid for many decades. The image of a country that is poor. The stereotype of the 1970s and 80s is back in way.

This crisis was an eye-opener. The poor were forgotten. The poor were just ignored. And you see them again, on the road, thousands of them.

In fact, the post 1991 liberalised India has increased inequalities and not reduced poverty. The last NSS Survey showed that the number of people living below the poverty line has increased – so it’s not as if India as the emerging country that was going to become a big power, is back to where it started. And that’s what has to be admitted and fought against. Because instead of growth, development should have been the motto. And the debate that should start in India is what have we done with the growth?

What have we done with the money we accumulated over 10 years when we had an almost double digit growth rate It has not been invested in welfare, infrastructure, education, health. So the debate should start.

So it should, Prof Jaffrelot, but having said that, this is a conundrum we have seen play out. We saw how demonetisation haemorrhaged the system, especially in rural India, and yet there seemed to be no political accountability for that?

This is the magic of populism. You delink or decouple politics and economics, politics and policies. You do politics, you play on emotions, you play on fear, you play on pride against others. And the mismanagement of economy or society is not your business, you’re not accountable for it. You get away with any problems society is facing.

The magic of populism lets you live in Wonderland, to be taken for a ride by discourses, speeches, emotions. It’s not only in India, this is the recipe that most nationalist populists of the world have articulated and largely, it works. Because the media play a different game now. They are either not in the position to ask questions, because there are no press conferences. Or they are not even in the mood to ask questions.

So when there is no alternative in the public sphere, it’s much more difficult to ask for accountability. This worked till now, I think we have come to the end of the road.

That’s my next question; do you think it will play out differently this time? Particularly considering the deep trauma migrant labourers have suffered through this time?

It will depend on the seriousness of the crisis – and it’s too early to say. If indeed the crisis is very deep and joblessness is all pervasive, we may see a reassessment of politics and policies. Especially because some chief ministers and state governments have been very good at implementing relief and support – all of them in the opposition by the way. Look at the state government of Maharashtra, Kerala, Rajasthan, Punjab, some of them are really doing a good job.

So if you appreciate real and effective policies, you look at politics with more reservation. And you see through the discourse and you expose the bluff. That’s possible.

By the way, the tension between Centre and states is now here to stay; there is now a divergence. Federalism in India is now challenged by new kind of Centre-state relations. Partly because of the way you try to do politics in New Delhi and you try to have effective policies in states.

There is also the matter of global perception – when this government came to power in 2014, there was the image of a government and country that was ready to get things done. In the face of the economic crisis we now face, how do you think perception has changed?

Well it depends where you look. Because there is a galaxy of leaders – Donald Trump, Netanyahu, Jair Messias Bolsonaro, Viktor Mihály Orbán etc who will not see anything wrong there. But the point is that if you turn to institutions, some departments of the UN, the EU, then you have a more critical viewpoint so far as human rights and the place of minorities is concerned. But on both sides, there is, I think something you can clearly appreciate.

Everybody expected more economic reforms.

You may be Donald Trump and a friend of Narendra Modi . On the economic front, there is tension. And this tension is largely due to the economic liberalisation that was expected and has not taken place. So the image of the country is very different according to the viewpoint you adopt, but I think there is consensus on this economic dimension.

There are several economists who also believe this is the apocalyptic moment for India, where we build a better economy and address many of our problems. What do you think is going to be the shape of the next few years?

This is the big question. What about the world after COVID. What kind of world are we rebuilding. And it’s just too early to say. Are we just going to get back to business as usual. Or are we prepared to say we went wrong because we misbehaved with nature.

These kind of epidemics are a reflection of the way man is encroaching on nature. This crisis has shown us that water can be blue in the Yamuna, the sky can be blue over Delhi and there is a better life we can ask for. So the alternative may be more welfare, less inequalities as you say. But also development that’s much more respectful of nature.

We are back to rural India in that way, because the way that rural India is developing is also not sustainable because of water scarcity etc. Maybe this crisis will help us realise that we have to change for good.

Decision makers will be quick to re-launch their own programmes and not necessarily listen to civil society. That’s the big challenge, can we be heard despite having alternate views.