The Hindu Business Line : Policy drought

The idea that the second fastest growing economy in the world is so dependent on rains for its fortunes exposes the biggest weakness in public policy so far.

India is probably the only country these days that wishes for dark clouds, literally. So far rain-laden clouds continue to play hide and seek underlining once again just how important the monsoons are in the Indian sub-continent. Kharif crop farmers, cardamom growers and tea planters are jittery and the organised economy wonders how delayed rains will affect their prospects in the rural and semi-urban markets. Now we have the Prime Minster’s Economic Advisory Council linking the economy’s prospects of seven per cent growth to the rains.

More than anything else, the idea that the second fastest growing economy in the world is so dependent on rains for its fortunes exposes the biggest weakness in public policy so far. The unpredictability of rains has been pretty well-known for centuries. Over the years, successive Plans have allocated public money on irrigation projects designed to fill in the gaps, yet the implementation record has been patchy as evident in the importance that rain-fed farming still occupies in the rural economy. Innumerable reports have pointed to the skewed distribution of water resources throughout the country, in part the result of topography itself whereby the coastal areas, the northeast and the hilly regions get the bulk of the rains. After decades of planning, policy has still not been able to harness the excess water of perennial rivers such as the Brahmaputra and other rain-fed rivers that dry up in summer. Artificial shortages have also resulted from inter-State disputes over river water-sharing leading to surplus water areas neighbouring dry ones. Yet, the biggest failure of policy has been in distorted priorities of public investments; increasingly, subsidies for power and fertilisers have elbowed out productivity-enhancing allocations for irrigation development, water conservation and rainwater harvesting. Since the 1970s, agricultural subsidies have risen from 3 per cent to 7 per cent of GDP; over the same period investments in the rural sector have declined from 3.4 per cent of agriculture GDP to 1.9 per cent.

Sixty years of unpredictable rains and perennial water shortages should have turned India into a pioneer of rain-water harnessing and harvesting; yet every year Indians pray for rain and then for shelter from its worst excesses. It is never too late for innovative public policy to target fiscal and monetary incentives for public action in urban and rural areas at least to conserve precious water resources for a dry day. And it might be time to revisit that old debate about national river networks expensive as they might be.

Related Stories:
Economy to grow at 7%, if rains don’t fail: Tendulkar
Scanty rainfall causes worry among farmers
Low June rainfall may not affect eventual harvest
Truant monsoon adds to tea production woes
Deficient rains likely to hit cardamom output
Deficient rainfall delays kharif crops sowing

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