Noting that two-third of farmers in India do not have enough land to earn a sustainable living, British economist Lord Meghnad Desai on Thursday said the next government in the country should look to create enough jobs and industries to pull a section of farmers out from agriculture instead of waiving farm loans.
"India has far too many farmers. Two-third of the Indian farmers have the land that do not provide them viable living. Those who are not able to sustain themselves through cultivation should be encouraged to get out of agriculture," he said.
"India was lousy for the first 40 years of its independence in creating jobs. So, people have stayed on with farming as they did not find better opportunities. Every other Asian country doing well economically has created enough jobs and industries to move the farmers off-land," he said.
Terming the farm loan waiver "as a terrible idea from economic perspective", Desai said subsidies and waivers are used as a political tool by all parties and none of them has the guts to collect taxes even from well-to-do farmers.
"Waiving farmers' loans and giving them subsidies might be a sustainable political option, but it is a terrible thing to do it from an economic perspective. Subsidy has been an answer to many issues in this country and the tax payers have never complained," the Padma Bhushan awardee economist said.
"It is being done by all parties. The tax payers should complain because if one is a poor industrial worker or an urban worker who is not able to pay one's mortgage, the government would not clear out his debts. None of the political parties in India has the guts to collect income tax from rich farmers or even declare that there are far too many farmers in the country," he said.
Talking about the country's economic growth, he said the nation is growing at a good rate for the last 20 years after severely faltering for the first 40 years of its independence.
"India has achieved a default rate of growth of seven per cent in the last two decades. For an economy that had been growing at 3.5 per cent for the first 40 years, this is very good growth. We had a long way to make up because the first 40 years were wasted. But since the reforms of 1991, especially since 1998 to 2018, the country has seen a good growth," Desai said.
He said those complaining about lack of employment opportunities are clearly under-counting jobs as a large section of people in India are a part of the informal sector that does not offer white collar jobs.
"If an economy is growing at a rate of seven per cent, for it to have no job growth, the productivity has to grow at a high rate. But productivity in India has not grown at the rate of seven per cent. So we are clearly under-counting jobs," Desai pointed out.
"Employment opportunities have been created. We often consider only while collar jobs as jobs. The formal sector in India is just one-third of the total non-agricultural sector. We have a large informal economy," he added.
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