The Political Economy of Droughts

Drought worse since 1987:

321 of 593 districts across India have been hit by drought.

Kharif Crop Crash: 10 million tonnes drop in output; 150 million casual agricultural labourers face joblessness.

Mega Power Crisis: 12 billion unit dip in hydel generation; demand may go up by 30 billion units

So the verdict is out. India is in the throes of yet another crisis. Thirteen of India’s 29 states have been declared drought-stricken. Experts say it is the worst drought in 12 years. The impact of this drought on the economy of the country is said to be catastrophic. Some economists feel that the impact on agricultural production might bring overall GDP growth down by 0.5 percent. This means that the growth of the economy is likely to end up between 5.0 to 5.4 percent, instead of the projected 6 percent.

On the streets, the result of the drought will be felt through the spiraling prices of the consumables. The manufacturing sector is already seeing a period of dismal sales, especially in the rural market. The inflation rate will go up to 3-4 percent. Where does the problem lie—in the monsoon clouds or with the polity?

Who loves a good drought?

So, who loves a good drought? Certainly neither the farmer nor the common man. Drought is after all an administrative decision. It is completely up to the whims and fancies of the local bureaucracy to declare a district drought-hit. Is there a basis to declare a drought? Hardly! The thumb rule is an archaic British Raj norm: the states can declare drought and ask for aid when 50 percent of the crop fails. The Centre has no role to play here. If the district magistrate finds that more than 50 percent of the crop is damaged, he can declare the district drought-affected. The report is thereafter sent to the State’s revenue department.

As soon as a drought is declared, revenue collection for the region is dropped, interest on loans is waived, and loan recovery is stalled or postponed for a certain period. Not only this, food for work programmes are started and cash relief distributed to all farmers. Noble intentions indeed. However, there are problems. For example, as soon as the Monsoons got delayed this July, several states declared overall drought in their states. From Haryana (which claimed to have received less than 69 percent rainfall) to Chhatisgarh (which claimed to have received less than 38 percent rainfall), 10 of the badly affected states have already demanded over Rs. 11,000 crores from the Central government. Thankfully, the Centre has over Rs. 11,500 crores in the Calamity Relief Fund (CRF) and the National Calamity Contingency Fund (NCCF) to stave off the crisis.

Demands for Dole

States Rainfall Demand for Aid (in crores)

Punjab -49% Rs. 800

Rajasthan -67% Rs. 4996

Haryana -69% Rs. 650

Uttar Pradesh -59% Rs. 750

Chhatisgarh -38% Rs. 1700

Andhra Pradesh -39% Rs. 610

Source: India Today, Aug. 12, 2002

The problem starts once the Centre releases the funds to the respective states. The Centre does not monitor how or who actually spends the allocated funds. So it finally makes its way to the local legislators – the MLAs or MPs. This is the reason why the MLAs and MPs compete with each other in declaring their constituencies drought affected. After then, in most of the cases, as shown by various media reports, the money just vanishes. The food for work programmes never get started, the farmers never get the cash relief, and other assistance given for crop damage. As a result farmers starve, die, or commit suicide. Those who dare to face life migrate to cities in search of non-existing opportunities for work.

And it is not only the village farmer who bears the brunt. People in the cities also get affected. Prices of cereals, oil, potato, onion, might not rise to a great extent, but those of milk and poultry products and vegetables spiral up. However, India’s food grain stocks will keep food prices from rising (the country has a buffer stock of more than 60 million tonnes).

Can droughts be banished?

The moot question certainly is—can droughts be banished from the country? The answer to this question seems to be a resounding yes. Investment in infrastructure, a segment for long neglected by the government and kept out of bounds for the private sector, is clarly the answer. In fact, in 1998-99, the Planning Commission accepted the thesis of one of its members, S. R. Hashim, that over 25 years India could insulate itself from the impact of drought by investing Rs. 75, 800 crores. This is an amount that is only twice the size of the annual subsidy bill. Agricultural insurance, which is another easing factor for drought-hit farmers, has been stagnating since 1999.

It seems that those who benefit from the droughts, and they are not farmers, want to perpetuate this ogre of droughts by refusing to make look at long-term strategies to shield agriculture and the economy from drought.