Economists call for new approach to rejuvenate agro-economy ‘hit by GST, demonetisation’

At JNU conference, social scientists, economists, political commentators and activists speak on poverty, inequality, Indian agrarian distress & shape of economy.

JNU professor and former Planning Commission Member Abhijit Sen | Youtube

New Delhi: Noted economist Prabhat Patnaik Saturday called for a new methodology to rejuvenate India’s agro-economy.

“Agriculture growth rate should be the new growth rate for India rather than GDP and other data points,” Patnaik, a former professor at Centre for Economic Studies and Planning in the School of Social Sciences at JNU, said Saturday.

He was speaking at a conference, “Theory, Planning and India’s Development Challenge”, organised by JNU to honour another eminent economist, Professor Abhijit Sen.

“Manufacturing is a demand constraint sector whereas agriculture is largely a production constraint sector. Henceforth, more emphasis should be laid on it,” he said.

Various social scientists, economists, political commentators and activists attended the conference and spoke on poverty, inequality, the Indian agrarian distress and the shape of the economy.

‘Agrarian crisis has worsened because of demonetisation, GST’

At another session, “Distressed in India countryside and policy response”, Prof D.N. Reddy from the Council of Social Development said the agrarian distress in India is on account of wrong policy intervention by the Narendra Modi government in the last five years.

Prof Reddy, who was chairing the session, said demonetisation and the methodology used for implementation of GST had further worsened the agrarian distress in the country.

“The agrarian crisis, which has been going on in the country for two decades, has worsened because of demonetisation and GST as they killed rural demand,” he said. “This was further augmented by the stagnation in the construction sector post-demonetisation as the rural workers who migrated to urban areas for daily wage had nowhere left to go.”

Sushil Khanna, professor of Economics and Strategic Management at the Indian Institute of Management, Kolkata, said the government has severely undermined the household sector, especially with demonetisation.

“It will take decades to do away the stagnation,” Khanna said. “Household sector has declined by 30-40 per cent post demonetisation leading to the destruction of the rural credit line and agricultural borrowing.”

‘Study of poverty has been reduced to merely study of poor’

Participating in the session, “Poverty, inequality and food security”, Prof Himanshu from JNU said the study of poverty, which was a macro subject and very central to understanding how the economy is functioning, has been reduced to merely the study of poor.

Poverty, inequality and food security are not just academic issues or are about numbers, he said. “These are the issues which require a kind of understanding or compassion for the people on the ground, which you will normally not find in most of the people in the Planning Commission including at the time Prof Abhijit Sen was there,” he added.

Himanshu said Prof Sen played a crucial role in making these issues about coming from heart but still linking it to the academic research that fructified into different forms.

“It was this approach to understanding economic issues, which came from understanding the politics of why we were doing research and that research cannot be divested from the reality we were living in and Prof Sen, not many will agree, kept that at the Centre of his research, at the centre of his work in planning commission as part of the government, and as a friend of civil society,” Prof Himanshu added.

‘Agriculture sector has to deal with a new issue of climate change’

Speaking on the occasion, Professor Abhijit Sen said he was not surprised at the closure of Planning Commission, of which he was a member. “Even before 2014, a large number of people within and outside the Planning Commission had the view that it should be put to rest.”

Speaking about agrarian distress and economic slowdown, Prof Sen said agriculture has multiple constraints like labour, credit, market and institutions, which it has overcome daily. “Agriculture sector has to deal with a new issue of climate change as it will keep happening and we can’t shy away from that.”

Others who participated in the daylong conference included CPI(M) leader Brinda Karat and Sayeeda Hamid.