Rural Imperative in the wake of COVID crisis

ECONOMY/ GOVERNANCE

Topic:

• GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development 
• GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. 

Rural Imperative in the wake of COVID crisis

Context: The main kharif planting season will begin only from mid-June with the arrival of the monsoon rains.

Agricultural Sector in 2020-21

• The year 2020-21 was exceptional, where the farm sector expanded by 3%, even as the Indian economy as a whole contracted by 6.5&. 
• Agricultural exports also grew 17.5%, despite the value of the country’s overall merchandise shipments falling by 7.2%. 
• Industries like tractor, FMCG and cement companies rode high on rural demand in 2020-21.
• The end result was that rural India provided a cushion for the economy, which suffered its worst recession since Independence and the first after 1979-80.

Reasons for above scenario

• Low impact of Pandemic: Covid-19 cases being very low in rural areas last year and the government exempting agricultural activities from lockdown restrictions
• Favourable Monsoon: Another reason was excellent rains and favourable winter temperatures that helped farmers harvest a bumper crop. 
• Favourable Prices: There was also a spike in global agri-commodity prices from around October, the benefits of which were reaped by soyabean, mustard, groundnut, cotton, arhar, urad and chana growers. 
• Right interventions by government: Firstly, government undertook massive procurement of wheat, paddy, mustard and rabi pulses that were marketed post the lockdown. The second was the record 389.37 crore person-days of employment that got generated under MGNREGA during 2020-21. Along with these two, there was Rs 6,000-per-farmer cash transfer under PM-Kisan that ensured sizeable liquidity infusion into the rural economy. 

What will be the scenario this year?

• The Indian Meteorological Department has forecast a normal southwest monsoon, while FAO’s world food price index hit an 83-month-high in April. On both these fronts — rainfall and prices — the outlook for agriculture, thus, remains favourable.
• The availability of cushion, provided by agricultural sector last year, is in doubt today, with the second wave of the pandemic not sparing rural areas
• This year, there is not much requirement for MSP procurement, barring in wheat. 
• The scope of MGNREGA works is also limited when Covid has made deep inroads into rural areas. 

Conclusion 

• If the current wave subsides by planting season of Kharif, things shouldn’t turn out too bad. 
• The focus of government should be more on cash transfers. There’s no better time to put to use the JAM (Jan Dhan-Aadhaar-Mobile) infrastructure than now.