P Chidambaram: PM Modi’s farm income scheme not a trump card; leaves out an overwhelming majority of poor

Former Finance Minister P Chidambaram calls PM Modi’s farm income scheme a “whimper” instead of a trump card that leaves out an overwhelming majority of the poor and benefits only the landowner class

Photo Courtesy: IANS
Photo Courtesy: IANS


Former Finance Minister P Chidambaram calls it a "whimper" instead of being a trump card that leaves out an overwhelming majority of the poor and benefits only the landowner class.

He also rejects criticism of Congress President Rahul Gandhi's announcement of loan waivers to farmers across the nation if his party comes to power, saying it was necessary to revive the agriculture sector "which is in the ICU" as a one-time measure.

The former Finance Minister defended the Congress's announcement of ensuring a minimum income guarantee for the poor if it is voted to power as "an implementable scheme" saying the Congress manifesto will explain the contours of the scheme justifying how it will be implemented.

"It (government's farmer relief scheme) is a whimper. It's not a trump card, to say that I will give you ₹6,000 per family. Who will get these ₹6,000? The land owner gets it. The land owner could be an owner-cultivator. But in many cases, it is an absentee landlord sitting in some capital city of the state," said Chidambaram in an interview coinciding with the release of his book "Undaunted - Saving the Idea of India".

"The tenant farmer does not get the money. The farm worker does not get the money. The non-farm poor - goldsmith, carpenter, blacksmith, shopkeeper, tailor - in rural areas does not get the money. And no urban poor gets the money," he said.

The Congress leader said if the government was talking about helping the poor, it was leaving the overwhelming majority of the poor and giving it only to the landowner class, "among whom there may be poor land owners, but there are also absentee land-owners".

"So this does not benefit the poor. It has already become a whimper," he said.

Rejecting criticism of loan waivers, including by Chief Economic Adviser Krishnamurthy Subramanian who called it "a moral hazard", Chidambaram said it was the duty of the government to help those in extreme debt.

"I laugh at the criticism that loan waivers are immoral. Then what do you call haircuts taken by banks for industrialists? So let's keep the morality argument out of it and look at the simple economics and the human problem behind agriculture," he said.

He said the average debt of agricultural families was ₹90,000 to ₹1 lakh.

"How can an indebted farmer ever repay ₹90,000 to ₹1 lakh? He is in the ICU. You have to first save his life, revive him. This is what loan waiver does... If people are deep in debt due to drought or flood or some other reason, how can a government say I won't relieve you of your debt?

"But I agree this is not a complete solution. After that, you have to ensure there is an increase in productivity, increase in production and the farmer gets fair price. If you fail to do that, 10 years later you will face the same problem," the Congress leader said.

He also defended Rahul Gandhi's announcement of a minimum income guarantee scheme for the poor as implementable and said liberal economists like Arvind Subramanian to right-wing conservative economists like Surjit Bhalla had said it was implementable.

"We have consulted a large number of economists of international repute. They say it's implementable provided it is carefully-designed, progressively rolled out. And it will be progressively rolled out," he said.

Chidambaram said while the contours of the scheme will be revealed in the party manifesto, the details would be fleshed out only if and when the Congress is voted to power.

Asked how much of an amount it was looking at, considering it called ₹6,000 support to farmers - which translates to around ₹17 a day - a "cruel joke", he said: "Obviously it has to be a minimum income into which every family will be brought so that the family can afford food, clothing, shelter, healthcare and education."

He also attacked the government on lack of jobs and said Congress knew how to create jobs and would show it if it comes to power.

"Congress knows how to create jobs. We know which are the job-creating sectors. Our manifesto will spell out how jobs can be created through the well-known job-creating sectors.

"Had we not created jobs (during UPA government), there would have been a huge outcry. Have you ever seen an outcry in earlier period equal to the outcry you hear today? People don't cry out for the sake of crying out. They cry out because of their anguish, their suffering," he said.

Asked how the Congress planned to create jobs, he said: "I believe that high growth will create jobs. And since we had high growth for the first seven years of the UPA government, I believe that a large number of jobs were created."

Chidambaram, however, admitted that while the UPA did create jobs, they were not enough to take care of the number that was entering the labour force.

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