Economic data reflects the plight of farmers and daily wage workers India’s rural pain goes beyond farmers, and it may be a problem for Narendra Modi
Reuters Report, Compiled by Noor majid : Three years ago, brick mason Pundlik Bhandekar was always busy as farmers in his tiny hamlet in Maharashtra commissioned new houses and nearby towns were undergoing rapid urbanisation. Now, as the rural economy sinks and the pace of construction slows, Bhandekar is struggling to get work.
“I used to get a new construction project before I could even finish one. People would come to my house to check when I would be free to work for them,” said Bhandekar, as he sat with friends under the shade of a tree on a hot afternoon.
From daily wage workers such as masons, to barbers and grocery shop owners – just about everyone in Zadshi village, some 720 km (450 miles) from India’s financial hub Mumbai, says a drop in farm incomes has dented their livelihoods. Their woes are symptomatic of a wider problem across India, where more than half of the country’s 1.3 billion people are dependent on agriculture for their livelihoods, as the slowdown in the rural economy is felt in the dampening sales of consumer goods, especially the biggest such as car and motorbike sales.
The slowdown has also dented Prime Minister Narendra Modi’s popularity in the hinterland that propelled him to power in 2014, and political strategists say it may mean he struggles to form a majority after voting in a staggered general election that began on April 11 concludes on May 19.
Zadshi has been almost entirely dependent on annual cotton and soybean crops that, according to farmers, have given lacklustre returns in the past few years due to a dip in prices, droughts and pest attacks. And as incomes have dropped, farmers have cut back on big-ticket spending such as building new houses, digging wells or laying water pipelines, squeezing employment opportunities for people.
“No one is interested in hiring us. We are ready to work even at 250 rupees ($3.60) per day,” said Bhandekar, who charged 300 rupees a day when work was steady, but now gets work only once or twice in a fortnight. Economic data reflects the plight of farmers and daily wage workers.
Retail food inflation in the fiscal year ended on March 31 fell to 0.74 percent, even as core inflation stood at 5.2 percent, according to Bank of America Merrill Lynch Research, eroding the spending power of farmers. Inflation adjusted wage growth for workers involved in crop sowing was just 0.6 percent 2018/19 compared with 6.5 percent in 2013/14.
The value of farm produce at constant prices grew 15 percent in the past five years, compared with 23 percent in the previous five, while the manufacturing sector grew 40 percent, against 32.6 percent in the previous five years, government data shows.
“Lower rural wages will result in lesser spending, which in turn will reduce demand for goods and services that are part of the rural basket,” Rupa Rege Nitsure, group chief economist at L&T Finance Holdings in Mumbai, told Reuters.