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Liberals plead against urban bias in reforms

The Indian Liberal Group speaks up for free market reforms to help farmers sell their produce easily and also get easy access to loans, reports Meenal Dubey.

india Updated: Nov 05, 2006 19:52 IST

While economic reforms and a host of sunrise and white-collar service industries have created millions of jobs for the country's relatively well-heeled middle class, it overshadows less visible factors like stagnation in agriculture and rural distress, say a group of Liberals who plead that the next budget must take their lot into account.

The Indian Liberal Group, a motley bunch of humanists, economists, corporate executives and accountants with an eye for the social details of the economy met in the Capital on Friday to unveil a document called 'Taking reforms to the poor', which spoke up with data and determination for an equitable society, and free market reforms to help farmers sell their produce easily and also get easy access to loans. This was their fourth year of 'The Liberal Budget'.

"It needs to be re-emphasised that this liberal position is not to be confused with an egalitarian society," the document said.

"Instead, the liberal strategy is to create a just and fair scoeity...for growth to all individuals, housholds, professionals, firms and corporates.

Agriculture, which accounts for a quarter of India's gross domestic product (GDP) and two-thirds of the population, was an obvious focus for the group.

"India's present growth momentum is driven by domestic consumption, especially of the middle class. The other significant factors are a resurgence of the corporate sector, infrastructural development - of roads, telecom, ports - and achievements in finance and banking, construction, civil aviation and information technology sectors," said DN Patodia, member of the Indian Liberal Group. "The agriculture sector has not got the attention it deserves."

"Inadequate employment, stagnant agricultural growth, high poverty and growing regional imbalances are some areas of concern," said Sunil Bhandare, Economist and Chairman of the Drafting Group of the Liberal Budget.

Citing a National Sample Survey Organisation (NSSO) survey, the report highlights that in the past 11 years, poverty ratio, or the percentage of the population below the poverty line, has declined at the rate of only 0.75 percentage points per year, underlining that at this rate, it will take more than 35 years to eradicate poverty.

The figure fell to 28 per cent in 2004/05 from 44.5 per cent in 1983 and 36 per cent in 1993/94, while overall GDP growth averaged 5.2 per cent between 1983 and 1994, and rose to 6.3 per cent in the next decade or so.

Agricultural growth has slipped to 2.4 per cent per annum in the post-reform period (from 1993-2005) from 2.9 per cent per annum in the pre-reform period (from 1983-1994), the report said.

Agricultural stagnation not only affects the process of poverty reduction in rural areas, but also affects urban poverty because of high migration rates and food prices, the report said.

The report has made recommendations for agricultural reforms.

"The availability of farm credit, better administration of agriculture extension services and encouragement of corporate and contract farming should be the main focus," the report said.

"Like (in the case of) traders, the doors of the free market should be opened to farmers as well. Farmers can sell their produce directly to potential purchasers thereby ensuring better price and access to new markets. All restrictive orders inhibiting storage, sale and storage of farmers' produce should be removed," it said.

"Small and marginal farms are not viable and any policy of allotting one or two acres to the poor should be done away with. Land ceiling laws should apply only to ownership lands," it said.

Email Author:meenal.dubey@hindustantimes.com