A_Gupta wrote: ↑29 Jun 2024 19:55
> The only real positive was the free foodgrain scheme - The mother of all freebies.
This actually reduced government expenditure. Government has to buy and store grain it acquires in support of MSP. Govt used to have years-old grain that became unfit for human consumption. Govt changed from giving subsidized 10 kg ration to free 5 kg ration; and also cleared all the godowns and storage cost and wastage. "Master stroke" is overused but this was one such.
> There was real rural distress. Rural incomes net of inflation, did not grow for 5 years.
Presumably there was regional variation in rural distress, and it was not an all-India phenomenon. After all, the BJP won big in some places.
It is correct that the govt reduced their accumulated (and unnecessary) food stocks to support this scheme. My point is, we rant about the
freebie culture, particularly if the opposition suggests it. Also, beyond a point the scheme is not sustainable. For e.g. Wheat stocks have
reduced from 60 million to 9 million tns. This is just above our minimum holding requirements and in the absence of a good crop, will be
unable to export, or intervene in the open market to being down prices (not doing either hurts the poor more).
Yes, there is a variation in rural distress. BJP did much better in cities (e.g. swept Delhi and Bangalore, vote share in Kolkata
didn't reduce). They did better where they were not the incumbent state govt.
There is a also a variation in State per capita rural income that I have commented on in an earlier post.
For. e.g. MP did better than UP. In 10 years, MP averaged 7.8% p.a agriculture growth, while UP was 3.6% p.a
West Bengal also did better in the last 10 years than UP.
The larger point is that we celebrate India's GDP growing at 8% last financial year (beating estimates), ignoring that Agriculture grew 1%
(my stats are approximate). On a per capita basis, it is a decline in income from agriculture.
The stock market grew 29% I am a beneficiary of that, as is 2.5% of the country and naturally we will support the govt that made us 29%
richer. There is however a disconnect between that thinking and most Indians who saw their real income decline because it is dependent
on agriculture. `Ambani-Adani' is just ap proxy for inequality of income growth (not wealth).