Increased MGNREGA demand results from large-scale unemployment in AP’s informal and rural economies due to highly neglected agri infra spending.

Representative image of a farmer at work in a green field He is walking in a water-filled field carrying a bundle of saplings in each of his handsImage for representation
news Governance Sunday, September 27, 2020 - 16:21

On September 20, the Udupi Chikmagalur MP posed a question in Lok Sabha on central allocation to states under MGNREGA. It was revealed that since the MGNREGA scheme was a demand-driven employment programme, states are allocated funds based on the demand from their populations. Andhra Pradesh had the highest allocation in India (Rs 7,088 crore) in the present year (up to September 16). Is this a statistic worth celebrating? In the context of the coronavirus induced recession in the last 6 months, do we conclude that rural Andhra is fully employed and devoid of large-scale suffering?

Consider another statistic. Recent National Crime Records Bureau (NCRB) data revealed that AP ranked third in India in terms of farmer suicides, accounting for 1,029 deaths in 2019. This represents a significant worsening from 2018, when 664 farmer suicides were reported. 2017 and 2018 were drought years in the state unlike 2019 when there was a bountiful monsoon. This indicates weather was less of a factor in suicides as much as state intervention was. The afore-mentioned MGNREGA data only reflects aggravated rural suffering. This scheme is the last resort for the unemployed. Increased demand for MGNREGA works results from large-scale unemployment in AP’s informal and agricultural sectors. A state with a population of 5 crore being allocated the largest amount in the country is a stark reminder of the state of agriculture and rural economy here. Where did we go wrong?

Infra spending: Promises and reality

In its 2020-21 budget, the current government announced an unprecedented doubling of spending on agriculture and irrigation. But, announcing large allocations is only the beginning of transforming any sector. It must be ensured that allocations are actually spent on programmes and projects as envisioned, without any possible wastage of funds. This unseen factor of the ability to spend is felt only when it is absent from on-ground development. This is evident when we see the current government has spent barely a third of its budgeted allocations on agriculture and irrigation sectors in 2019-20. Despite favourable monsoons, neglecting irrigation spending has hurt farmers and the rural economy.

 

Spending in crore rupees

Budget for Agriculture

Expense on Agriculture

Expenses as % of Budget

Budget for Irrigation

Expense on Irrigation

Expense as % of Budget

2013-14

968

805

83%

9101

8454

93%

2014-15

2341

6379

270%

5158

5075

98%

2015-16

5905

3745

63%

4678

8329

178%

2016-17

4702

6565

140%

7325

8810

120%

2017-18

7167

5941

83%

11832

7451

63%

2018-19

9889

7974

81%

15596

11516

74%

2019-20

18093

5813

32%

12207

4537

37%

 

Source: AP Finance Department Portal | apfinance.gov.in

The current government has shown a disturbing lack of ability or policy direction in terms of its agricultural policy. It has only been talking of its Navaratnalu scheme and about building three capitals this past year while neglecting the irrigation and agriculture sectors. Its misgovernance and non-spending on these sectors spells disaster for a state that recorded India’s highest growth rates in agriculture between 2014-19. In spite of debilitating weather conditions and external shocks, agriculture in Andhra showed average growth rates above 10% in agriculture and allied activities between 2014-19. These gains in our agrarian economy are being irreversibly damaged now.

On the supply side of state intervention, cancelling long-term agreements, unfairly taking companies to courts, and inviting bids only to resort to reverse tendering has created an atmosphere of bad faith. When a company is simply not sure of being reimbursed, not sure of its agreements being honoured or gaining a bid only to lose it in reverse tendering, it simply stops participating. We will end up with a sub-optimal set of company options who can’t deliver effectively without compromising on efficiency and quality. Construction has come to a standstill, tenders go to crony capitalists, development has stagnated and farmers are worse off.

On the demand-side, not a single insurance claim under the PM Fasal Bima Yojana (PM Crop Insurance Scheme) in Andhra Pradesh had been settled for 2019-20. This is shocking since the claims are worth more than Rs 1,800 crore. This was revealed by the Agriculture Minister himself in the Lok Sabha last week. How are farmers to reinvest their savings and revenues on a new crop when their claims are not settled on time? Such gross failures in supply-side and demand-side interventions in the rural economy will only result in drastic loss of livelihoods, only exacerbated by the COVID-19 pandemic.

Decentralisation in words and actions

Only Rs 10,350 crore out of the total budgeted allocation (Rs 30,300 cr) on agriculture and major & medium irrigation projects was spent in 2019-20. Budgeted spending on important irrigation projects in Kadapa, north coastal Andhra, Ongole, Anantapur, Kurnool, Polavaram, Krishna and Godavari delta systems fell terribly short of the target. How can a government aim to decentralise agricultural development when it cannot build irrigation infrastructure anywhere in Andhra? The current government lacks the ability or political will to spend on any of the projects begun by the previous governments.

Status of irrigation project spending in Andhra Pradesh in 2019-20 (in crore rupees)

In Crore Rupees

Kadapa

North coastal

Ongole

Anantapur

Polavaram

Kurnool

Krishna delta

Godavari delta

Budget Allocation

622

488

670

1343

5254

287

1336

122

Expenditure

204

103

230

695

1311

206

436

5

Utilization %

32.8%

21.1%

34.3%

51.7%

24.9%

71.7%

32.6%

4.1%

Source: apfinance.gov.in

Nothing exposes the hypocrisy of this government than its promise of income support to farmers. As per the 2019 budget, Rs 8,750 crore was to be spent on the YSR Rythu Bharosa scheme for 48.7 lakh landed farmers and 15.36 tenant farmers. As per revised estimates, this assistance was only extended to 46.5 lakh landed farmers and 1.58 tenant farmers at an outlay of Rs 3,615 crore. Barely 10% of funds allotted for PM Fasal Bima Yojana was actually spent. It indicates widespread lack of access in claiming redressal, especially for farmers who suffered drought in Rayalaseema or floods in the Krishna-Godavari delta last year. A Price Stabilisation Fund of Rs 3,000 crore was grandly announced to “to enable market intervention in both agriculture and horticultural crops to ensure just price to farmers”. More than 80% of this remained unspent.

The TDP government single-mindedly pursued completion of projects on rivers, encouraged alternative ways of agriculture (for example, ZBNF, APDMP), and implemented measures to drought-proof Andhra. Long in gestation, crucial phases in the Handri-Neeva and Galeru-Nagari projects were completed, bringing surplus waters from Krishna to the arid parts of Rayalaseema. More than 300 tmc of Godavari flood water was transferred to the Krishna basin through the Pattiseema Lift Irrigation project since 2015. The brown waters of the Godavari gushing into the Krishna was a sight to behold, providing farmers in the Krishna delta region the ability to raise an additional crop.

On the other hand, the present government displayed a remarkable ineptitude in achieving its own meagre targets in any region of the state. It has excluded millions of farmers from welfare, insurance or even fair prices for their crops, grossly neglected irrigation works all across Andhra, and simply stopped construction of flagship projects. The cumulative effect of these and other failures has had disastrous effects that were intensified by the COVID-19 pandemic. With rise in unemployment and an unconscionable increase in suicides, we end up with a situation where Andhra has the highest MGNREGA allocation in the country. Without a drastic turnaround, rural economies and farmers face serious questions and vulnerabilities in the years ahead.

Ram Mohan Naidu Kinjarapu is a two-time Member of Parliament from Srikakulam constituency and is a member of Telugu Desam Party. He was among the youngest MPs in India when first elected in 2014.

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