Champaran Centenary: Tale of a century

''There is an Indian saying: “Pray strike on the back, but don’t strike on the belly.”’ Under the ‘native despot the people keep and enjoy what they produce, though at times they suffer some violence on the back. Under the British Indian despot the man is at peace, there is no violence; his substance is drained away,unseen, peaceably and subtly — he starves in peace, and peaceably perishes in peace, with law and order.''

          Dadabhai Naoroji perfectly described the British rule in India through the above critique of British economic policies. British disturbed the agrarian system in India like no other ruler before them. Systems like Zamindari, Ryotwari were introduced with sole purpose of maximizing revenue. According to some estimates, the peasant of Champaran were subjected to 40 different taxes when Gandhiji arrived there on 10th April, 1917. He successfully fought against those oppressive policies and landlords partially agreed to peasant demands. The event was significant for two reasons. First, the strategy of Satyagraha which Gandhiji developed during his stint at South Africa was introduced in the Indian freedom struggle. Second, it brought the peasants into mainstream of freedom struggle. The second is important because peasant constituted the major part of Indian population of the time, and no movement could have been successful without their active participation. They played a major role in Gandhian phase of freedom struggle. Thus, Indian freedom movement was also the struggle against the oppression of peasants. 

          Fast forward five decades to 1960s. India was facing a severe food shortage due to rampant famines and had to depend of imports. This was the time when, then PM Lal Bahadur Shastri made an appeal to citizens, to skip a meal everyday during Indo-Pak war of 1965. The slogan ''Jai Jawan, Jai Kisan" perfectly captures the mood of the times. The need to increase agricultural produce was realized. With increase in public spending on irrigation, research of high yielding variety of seeds, price support for procurement, easy credit through opening of rural bank branches (nationalization of banks by PM Indira Gandhi had a role here), the agriculture growth soared during next decade. This phase is described as Indian green revolution. As a result, India not only became self-sufficient, it started exporting food grains to many south Asian countries.

          Fast forward another three decades to 1990s. Indian govt. faced with balance of payment crisis ushered in an era of neo-liberal reforms and rest is history. GDP growth soared to 8% in 2000s and India found itself on the 4th position in list of countries ranked by GDP (PPP). There is also a parallel narrative to this growth story. The growth rate of agriculture has reduced since 1990s. The share of agriculture in GDP has gone down from 50% to less than 15%. Yet, the percentage of population engaged with agriculture is still above 50%. Post reforms, the focus of govt.was on reduction of fiscal deficit to attract foreign finances. To achieve the fiscal targets the expenditure on agriculture was reduced substantially. On the other hand, reduction in import duties led to fall in commodity prices with increasing competition from imports. Rural branches declined and priority sector lending to agriculture received reduced impetus. The farmers had to borrow from money lenders, with high interest rates causing debt traps. More than 2 lakh farmers committed suicide in the two decades following reforms.

          Fast forward another two and a half decade to 2017. A political party implemented its promise of farm loan waiver within a month of forming government in India's most populous state. This has triggered competitive politics around loan waiver with CM of Punjab meeting PM with similar waiver demand for his state. The demand coming from a state that led the green revolution reflects on the severity of agrarian crisis. The loan waiver without doubt provides huge relief to farmers. Yet, RBI governor asked political parties to eschew such promises during elections. The SBI chief emphasized on the disadvantages of such loan waivers. It will encourage farmers to strategically default before elections with expectation of similar waivers in future. This will also deter banks from lending to already credit starved agri. sector. Detractors of such loan waivers also provide the examples of previous waivers (the biggest one was in 2008 by UPA govt.) that helped only in short term without dissecting into the long term issues. A few remedial steps suggested by experts are 1) improvement of logistics, 2)socio-economic growth of rural areas, 3)land reforms, 4)reduced dependency on monsoons, 5)FDI in retail. Apart from these there are numerous other policy levers at govt.'s disposal provided the focus is on long term improvements. 

          After 100 years of Champaran, Indian politics still revolves around the issues of peasant distress. This may be a good news for Indian democracy but not for Indian economy. Rising inequalities (rich&poor, rural&urban, agriculture&services) has been a part of Indian growth story post reforms. This inequality manifests itself partly in agrarian crisis that remains hidden behind the growth boost provided by the services. If India has to reach & sustain a double digit growth for next 2 decades, it cannot ignore it agriculture sector. It may not be easy but it is definitely not impossible. It will certainly involve politically difficult decisions but with a stable majority government in center, it is probably the best time for these measures.