Chakravarthy Nallamothu is a firm believer that Modi squandered away a once in a generation opportunity to put India on a path to economic prosperity. His demonetization fiasco, the disaster that GST has become, his high taxation, heavy regulation, failure to privatise failing banks and public sector companies, the imposition of restrictions on exports and imports- especially imposing import tariffs to help the businesses that are friendly to him, and last but not least, abusing his power to help the crony business houses, such as the Ambanis and Adanis.
This effectively summarises how Modi destroyed India’s economic future.
With that background, I probed into the three legislative bills that the Modi government has passed in the parliament. I didn’t find anything seriously problematic. In fact, I felt that they didn’t go far enough. The only bit of reservation I had was where the State governments are not allowed to levy a market fee or cess. Though this is a desirable clause, it violates the federal spirit and unduly interferes in states’ administrative functions.
I have been doing full time farming for nearly eight years now. I have sold my fruits in Hyderabad, Bangalore, Chennai, Vijayawada, Delhi, and Kolkata. I have sold my fruits in APMC markets, state markets, and directly to retailers like Heritage and Reliance. I have entered into a future contract with buyers in the past, but these contracts were informal in nature. The future contracts I entered into were more of gentlemen agreements and these kinds of agreements are struck by fruit farmers and buyers all the time.
So, I am not very clear how this bill is going to help me because I practically already do everything that the bill is supposed to enable me to do. It is possible that farmers growing other commodities face draconian restrictions.
APMC is no doubt a problematic institution. Most of these wholesale markets overcharge farmers. For instance, I sell my fruit in APMC Azadpur Delhi market. As per the rules, farmers should be charged 4% commission, but the reality is, we are compelled to pay 8%. In Hyderabad, we end up giving up 20% in fee- 10% commission, 10% soot. In addition, we also incur loading and grading charges and market fees.
Directly dealing with retailers and big chains eliminates some of these intermediate inefficiencies. However, it comes with its own pitfalls which are beyond the scope of this note.
In conclusion, fewer restrictions, freedom to cross state borders, being able to sell to whoever you want to, ability to enter into future contracts, taking items off the essential commodities list are the changes we must welcome with open arms. These will help farmers immensely.
Don’t let your dislike for Modi cloud your judgment on these reforms.
Note: Nalamotu Chakravarthy is Founder of Center for Individual Liberty. You can reach the author on Twitter