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the state, Modi is disposed towards using the state in the fulfilment
of a larger objective. In 2014, on assuming power, the stalwarts of
the Modi Government genuinely believed that a blend of political
stability, honesty of approach and a set of broad market-friendly
reforms would be enough to trigger private sector investment to
facilitate rapid economic growth. Unfortunately for him, it became
clear in the first six months that India’s private sector was too beset
with its own problems (not least of which was a sustained exposure
to cronyism) to take advantage of a favourable business environ-
ment. The Modi Government’s over-dependence on public invest-
ment and foreign direct investment was a consequence of a quick
realisation that India’s corporate sector lacked the will and audacity
to rise to the challenge. once convinced that public investment
had to be at the forefront of the effort, Modi turned his energies to
ensuring the relative efficiency of the state.
Likewise, Modi has had an aversion to the culture of freebies
and handouts, the hallmark of the erstwhile UPa Government
that in turn was disproportionately influ-
enced by sonia Gandhi’s NGo-oriented Na-
tional advisory Council. during the 2007
Gujarat assembly election, Modi resisted
all pressure from within the bJP to either
write off the dues of those farmers that had
defaulted on electricity bills or withdraw
cases against those charged with theft of
power. In his view, the state electricity
board had just about been nursed back to
modest profitability and it would be disas-
trous if bad practices were condoned for the
sake of political expediency.
This example acquires relevance in the
context of some approaches of the Modi
Government in coping with the fall in ag-
ricultural income as a result of the dip in
prices of agricultural commodities. In 2009,
the UPa Government had been confronted
with a broadly similar problem, with farm-
er suicides rampant in Maharashtra and
andhra Pradesh. Its approach was to write
off all farmer loans, a measure that proved a
great success electorally. so far, despite pres-
sure, the Modi Government has resisted
all attempts to provide a short-term, albeit
politically rewarding, solution to the prob-
lem of rural distress. on the contrary, this
budget has attempted to create a long-term
institutional framework for agricultural
subsidies through the implementation of
the Ms swaminathan Committee report.
by fixing Minimum support Prices (MsPs) at 1.5 times the cost
of production, a recurring demand of farmer organisations, it has
tried to bring some order into the system.
whether this approach—which doesn’t base itself on discre-
tion but on other measurable criteria that will be worked out by
the Niti aayog, the Centre and state governments—will contrib-
ute to fulfilling the bJP manifesto promise of doubling farmer
incomes by 2022 will be keenly watched. according to economist
ashok Gulati, if farmer demands are fully met, the MsP of paddy
and soyabean will increase by 44 per cent, maize by 47 per cent,
groundnut by 38 per cent and long-staple cotton by 52 per cent.
what is reassuring is that this proposed MsP accretion seems a
step for the creation of a National agriculture Market. Predictably,
this is not going to happen overnight, but the seeds have been
sown and pressure from below could result in the gradual ero-
sion of restrictive practices that have marred Indian agriculture.
The desire to blend welfare with efficiency is a hallmark of theFinance Minister Arun Jaitley
in his office the day before his
Budget speechPhotograph by rohit chawla