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YSRCP rejects Economic Outlook for cutting input subsidy to farming: Aug 18, 2012
20 Aug 2012 1:18 AM
Hyderabad, August 18: Taking strong objection to the cut in input subsidies for agriculture in the Economic Outlook for 2012-13, YSRCP has demanded the Centre not to accept the recommendations of the PMEAC headed by Dr C Rangarajan as farming sector would take a severe beating.
“The Prime Minister’s Economic Advisory Council (PMEAC) has recommended to do away with input subsidies to agriculture including free power to farmers, which will badly affect the farming sector and we oppose these recommendations as YSR has proved that the growth rate can be improved by giving farm subsidies,” Party Advisor, DA Somayajulu told reporters here on Saturday.
With all the subsidies in place, including free power, the growth rate during YSR term in the State recorded 6.8 per cent and agriculture production in the arid Telangana region itself increased from 8 million tonnes in 2003-04 to 24 million tonnes in the next five years.
“This clearly indicates that input subsidies will increase production and productivity as well and we demand that the recommendations on axing input subsidies to agriculture should be rejected, “he said.
Though the PMEAC tried to paint a rosy picture of the economy, facts speak otherwise with the deficits going up over the past five years due to policy paralysis of the government. The trade deficit swelled from $ 20 billion in 2004 to $ 185 billion in 2011-12 while the financial deficit and revenue deficit along with current account deficit increased manifold during the same period, Somayajulu said.
The mounting deficits and lack of proper planning and cut in subsidies to agriculture will put the clock back to the 1970s where ship-to-mouth agriculture was forced on the country (importing food grains). The non-performance and lack of decision making by the government during the past three to four years had put the country on the brink of crisis, he said.
The annual agricultural growth rate has fallen from 5.2 per cent per annum in 1981-1990 to 3.2 per cent in 1991-2000 and dropped further to 2.4 per cent in 2001-10. The PMEAC recommendation to cut the input subsidies will further deteriorate the farming canvas of the country, he said.
While the US, European Union and some of the OECD countries have been giving huge chunks of subsidy to agriculture in their respective countries they have been advocating for subsidy cuts in developing countries for mercantile reasons, he said.
“We demand that the recommendation to slash input subsidy be withdrawn as it spells bankruptcy of ideology. On the contrary economic activity with improve with input subsidies like free power, supply of quality seeds and fertilizers at supportive prices,” he said adding that a letter to this effect will also be written to the concern person.
The same Dr C Rangarajan had earlier recommended that nationalised banks should reserve at least 18 per cent of their lending to agriculture but the lending rate in reality is hardly 10 to 11 per cent, he said.