28 NALSAR Law Review [Vol.6 : No.

CRISIS IN INDIAN AGRICULTURE A TEMPORARY

ECONOMIC PHASE: CRITICAL ANALYSIS OF INDIA AS A
WELFARE STATE**
Rachna Reddy B. *
Abstract
This academic paper seeks to critically analyze the present
state of crisis in Indian agriculture. The startling number
of farmer suicides is the ultimate result of a variety of
distorted and catastrophic policies. Whether the MSP
decided by the government, contributed to the farmers debt
with no research on remunerative pricing based on the
current market, and production costs, is a controversial
issue, needing resolution. This paper analyzes whether
India as a Welfare State can be justified in reality or is a
mere myth, keeping the present agricultural crisis in
perspective?
Introduction
‘Farmer’s India,’ (‘Rythu Bharatam’ or ‘Kisan Ka Bharat’) was
the catch phrase and a manifestation that India was, not too long ago. But,
today the very survival of the farmer who ploughed his land and most
importantly fed the masses of India is struggling for his very survival and
has knocked on all possible doors and exhausted all his remedies in trying
to merely live and earn an honest livelihood. The crisis prevalent in agriculture
in India today, did not come about overnight, but has been the result of
governmental apathy and ill advised policies over the past two decades at
least.
The Constitution of India provides for a socialist welfare state, where
the aspirations of the people and what the government should aspire to
provide for the people in the very ambitious Directive Principles of the
State. But, the present state of crisis in the most primary sector of production
in India, i.e., agriculture requires immediate action that possibly cannot be
resolved merely by attempting to remind the government of its responsibility
on being elected by the people. Their election manifestoes had prominently
included removing agriculture from the present state of doldrums.
** Paper presented at the UGC SPONSORED NATIONAL SEMINAR ON SOCIAL JUSTICE
AND WELFARE STATE: MYTH AND REALITIES, 27-28 NOVEMBER, 2010, Organized
by Department of Law, University of North Bengal.
∗ Lecturer, NALSAR University of Law, Justice City, Shameerpet, R.R.District, Hyderabad
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 29
Critical Analysis of India as a Welfare State

Crisis in India’s Primary Sector: Agriculture

Agricultural sector continued the negative growth trend last year 2009
while all other sectors showed a positive growth trend. Approximately 118
crore of Indian population depends on agriculture for their food
consumption.1 Further, the Indian agriculture also provides for animals and
raw materials for the industries. Approximately 14.5 crore families are
involved with agriculture for their sustenance and 12 crore agricultural
labourers depend on agriculture and seasonal crops for their daily wages.2
Furthermore, approximately 9.5 crore families are dependant on other allied
aspects of agriculture for their livelihood.3
In 2003 when the government thought that food grains were in excess
they decided to negligently dispose off 7.5 lakh tonnes into the sea.4 In a
country where a large number of the population is well below the poverty
line and a lot of the families are struggling to obtain 2 square meals this
kind of massive, large scale wastage shows the utter failure of the
government to even comprehend the disaster in the making. M. S.
Swaminathan, an acclaimed plant geneticist who heads India’s National
Farmers’ Commission and a pioneer of the ‘Green revolution’ of the 1960’s
has said that: “Economic growth averaging 9% a year fuelled by
manufacturing and services has masked the crisis in the countryside.”5
The disastrous state of the agricultural sector and the continuing
downward trend of production are exemplified by the following figures. In
2007-2008 our government has imported 60 lakh tonnes of wheat, 35 lakh
tonnes of pulses and 80-100 lakh tonnes of cooking oil. The stagnation of
food output and the pervasive struggle with lack of credit facilities, crop
failures and high debt have been persistent crisis that the Indian farmer
and the entire agricultural sector are facing today.6
Industrialization Bias and the controversy about Special Economic
Zones
The kind of economic input and encouragement that the government
is giving to industrialists in comparison to agriculture is indeed worth
1. Nagendranath, Erneni, Handbook published by ‘Rythanga Samakhya Andhra Pradesh,’ (a
farmers’ organization) (2010).
2. Ibid.
3. Id.
4. Id.
5. ‘Green Revolution pioneer sees crisis in India’s agriculture,’ Economy and Politics,
http://www.livemint.com and The Wall Street Journal, (Jan, 10, 2008) accessed on 24/
01/2010.
6. Ibid.
30 NALSAR Law Review [Vol.6 : No.1

reporting and considering. For the development of an industry the

government is providing land at a cheaper rate compared to the market
rate, providing them with substantial credit facilities at low interest rates,
providing concessions on interest, tax benefits and reduction where they
are not expected to pay for a specific number of initial years, water and
continuous uninterrupted supply of electricity.
Recently, under the controversial SEZ (Special economic zones) the
industries get several more benefits for their development. In 2009-2010
government has given concessions in customs duty, excise, corporate and
income tax worth 4,98,500 crore reduction and even did away with the
surcharges on corporate tax. Recession packages for industries in addition
to the above is 1,66,000 crores.7 Just as the Chinese inspired SEZ’s for
industry impetus are being championed by the government, M.S.
Swaminathan is of the opinion that rings true in the present agricultural
crisis is that Special Agricultural Zones to regiment and improve agricultural
produce and reduce widening disparities to urgently save the Indian
agriculture sector facing extinction, should be the government’s urgent
priority, along with administrative support, infrastructure and market support.8
When it comes to agriculture, there are several restrictions that
agriculturists have to follow, i.e., a land ceiling at 25 acres for wet land and
54 aces for dry land, which is not scientific at all, whereas hypocritically
the industries have no restrictions on the amount of land they can own.
Furthermore, other than the fertilizer subsidy there are no other facilities
that the government is ready to give agriculturists. No viable credit facility.
In the midst of widespread protests against the SEZs in the face of
stagnation in agriculture, where food grains are being imported, the present
global picture that India paints for the world is that of ‘Shining and
prosperous India,’ renowned for its science and technology, but the
simmering discontent of the masses involved with the present disastrous
state of agriculture is being shrouded and ignored by the government.9
The SEZ Act of 2005 notified about 400 economic zones, most of
which were fertile agricultural lands for the purpose of commerce and
industry. It has been estimated by Khasanoki a writer that about 5 million
hectares of land has been acquired by the government for purposes other
than agriculture during 1991-2003, which is almost half of what was acquired
7. Supra n. 1.
8. Supra n. 5.
9. Aerthayil, Mathew,‘Agrarian Crisis in India is a creation of the Policy of Globalization,’
Mainstream Weekly, Vol. XLVI, No. 13, (March 15, 2008), accessed on 15/10/2010.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 31
Critical Analysis of India as a Welfare State

in the past 40 years before 1991.10 This is proof of the blatant manner in
which the government is resorting to taking away the right to life including
livelihood of the poor farmers by leaving them with no hope of rescue.
The Infamous Minimum Support Price (MSP) and its Negative
Implications
Industrialists or even small businessmen calculate the market price
of their products based on their cost of production, other expenditures and
the market trend all by themselves, whereas, in case of agriculture, the
agriculturist is forced to follow the unscientific MSP (minimum support
price) which has no relation to the real costs of production of an agriculturist
and is completely unviable for the agriculturist who is forced to sell through
middlemen, profiting them at the expense of the agriculturist. The MSP is a
standardized price predetermined by the government that lays down the
price at which the farmers are allowed to sell their produce in the
marketplace. It is also an avenue through which the government seeks to
procure the produce from the farmers for redistribution. But, since
globalization the government is procuring less and less from the farmers,
and continues to fix the MSP giving no indication of the data or the statistics
based on which it is fixing the price, resulting in a completely unscientific
and unremunerative support price to the detriment of the farmers.
The fact that the MSP is inadequate to sustain the farmers and their
ever increasing costs of production due to lack of subsidization or any other
institutional help or financing is indicative of the fact that the government
has to either abandon the concept of the MSP and let the market trends
and the real costs of agricultural production decide the prices, or should
reinvestigate their data and fix the MSP based on the realities of the situation
of the farmers and agriculture in India.
The step motherly treatment of the government towards agriculture
is blatantly evident from the fact that the recommendations in the 2006
report of the National Farmer’s Commission headed by acclaimed
agriculture scientist Dr. M.S. Swaminathan have not been considered by
the government to date. In the report Dr. M.S. Swaminathan recommended
that the government should add 50% to individual agricultural costs of
production and decide the MSP to make it viable and sustainable for the
farmers, as support price, but, neither the recommendation nor the report
has been heeded by the government.11 The government is putting severe
restrictions on the price of food grains, in order to control inflationary trends.
1 0 . Ibid.
11. Id.
32 NALSAR Law Review [Vol.6 : No.1

In the process it is setting an unscientific MSP with no consideration to the

real costs of production of agriculturists thus directly depriving them of
their right to life and livelihood. The hapless farmer is in a situation where
the government is neither supporting his efforts to feed this country but
also depriving him of the ability to earn an honest livelihood and care for his
family. The MSP is also a mechanism through which the government procures
food grains from the farmers. But, post reforms and globalization the
procurement of the government has been nominal, hardly 15% to 20%,12
while it insists on setting the MSP, even if it is unscientific and actually
harms the farmer.
Another surprising and blatant hypocrisy of the government is evident
from the fact that when a farmer decides to sell his land he is expected to
pay a 10% registration fee and food grains are taxed at 10% as well.
Whereas, the tax for gold and jewelry is only 1%.13 A surprising analogy
begging for the reader to contemplate!
The annual income of an average farmer is anyways seasonal and
just enough to meet his basic needs, being very minimal. Here the farmer
has to meet the costs of production, expenditure on agricultural animal
breeding and upkeep, family expenses, dependants, education and health
expenses, travel expenses and other emergency requirements. Unable to
meet all these expenses and repay high interest agricultural loans with his
extremely moderate and presently insufficient income the farmer is in dire
straits and resorting to extreme steps like suicide.
Globalization- Death Knell to ‘comparative advantage?’
60% of the Indian population is dependent on agriculture, but the
government keeps ignoring it. India embraced globalization and liberalized
its markets in the early 1990s. The signing of the World Trade Organization
(WTO) agreements, particularly the Agreement on Agriculture, was the
cornerstone that totally transformed Indian agriculture, for better or for
worse is anyone’s guess.
India has always been a forerunner along with Brazil in all the WTO
discussions beginning from the GATT era about 47 years before the WTO
came into existence. India was also extremely proactive in negotiating and
representing the demands and needs of the developing economies, especially
relating to the policy of protectionism in relation to primary products by
refusing to engage in agreement negotiations on Services, Intellectual
1 2 . ‘Agricultural Crisis and Farmers’ Suicides,’ www.indiacurrentaffairs.com, (July 8, 2009)
accessed on 15/10/2010.
1 3 . Supra n. 1.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 33
Critical Analysis of India as a Welfare State

property etc., until some resolution was achieved on primary products.14

When the west especially the USA and also EU not only wanted uniform
reciprocity and complete liberalization, but also wanted to obsessively protect
and subsidize their primary industries, while demanding that the developing
countries liberalize their own economies, India was at the forefront
negotiating and demanding special and differential treatment to be given to
developing countries taking their developing country status into perspective.
India along with Brazil and other developing countries pushed through
a hard bargain where they not only successfully managed to open up the
western markets for the export of primary products, especially food grains
and other allied products into the west along with completely reducing their
tariff and non tariff barriers, but also managed to incorporate ‘Part IV,’
into the WTO final agreement and other measures especially for the benefit
of the developing countries to overcome the negative balance of payments.15
India, essentially through its negotiations in the WTO managed to
get for the developing countries their ‘natural comparative advantage,’ in
producing and exporting primary products all over the world with adequate
encouragement and help from the respective governments. Essentially the
principle of ‘comparative advantage,’ was the foundation of the erstwhile
GATT and the present WTO, where each country that was part of the
WTO would not only grant ‘most favoured nation’(MFN) status and give
national treatment to every other country, but would also encourage the
export and import of products from those countries that had a natural
comparative advantage in a particular industry because of their ability to
produce in that industry that is complemented by the natural resources and
the genuine inclination and ability of the people of the said country to
produce.
The Agreement on Agriculture that was part the agreements of WTO
that was signed by India required a phasing out of protectionism until 2005, not
the complete unabashed opening up of the agricultural sector under the guise of
globalization and privatization, without any cover for the Indian farmers,
rescinding public investment in agriculture, withdrawing of credit facilities and
distribution systems that were not efficient to start out with and leaving the
Indian farmer at the mercy of international agricultural corporations that are
surely putting a death knell to Indian agriculture as it was.
1 4 . Lowenfeld Andreas F., ‘International Economic Law,’ International Economic Law Series,
Oxford University Press, (2002), pp. 61-62.
1 5 . Ismail, Faizel,‘Rediscovering the Role of Developing Countries in GATT before the
Doha Round,’ (RIS DP # 141), Research and information Systems for Developing Countries,
(September 2008), www.ris.org.in/dp141_pap.pdf, accessed on 21/11/2010.
34 NALSAR Law Review [Vol.6 : No.1

The Indian government has today completely undermined the policy

of ‘comparative advantage,’ as understood in the WTO by adopting policies
that destroy the Indian agricultural sector. India as a nation is believed to
have an extremely strong natural comparative advantage in the large scale
production of basic food grain crops like rice (paddy), wheat, cotton and
different kinds of oils. But this comparative advantage and the special and
differential treatment that the developing countries negotiated so hard during
the WTO negotiations is being eradicated through faulty import-export policy
in relation to food grains.
According to Dr. Aerthayil, with the introduction of Structural
Adjustment Policy (SAP) in 1991 the Indian government was obliged to
follow the directives of the World Bank, International Monetary Fund and
the WTO that required uniform MFN status and more importantly trade
liberalization, where the economic policy of countries would require
drastically reduced tariffs and import barriers.16
Today, the government is importing agriculture produce without
imposing any duties and at the same time, government is restricting our
produce by severely restricting our exports. Due to this the agriculturists
are suffering huge losses. An example of this trend is that in 2007 wheat
per kilo was exported for Rs. 7.46/- and the very same year due to shortage
they have imported wheat at Rs.16/- kg.17 This shows our government’s
complete failure and disregard towards farmers’ futures. India is today in a
shameful position where it is quickly turning into a net food importing nation
from being in the envious position of one of the global leaders of agricultural
exports.
On account of Globalization and the fact that India is a signatory of
the WTO and is as a result bound by its commitments relating to MFN
status and other basic principles of WTO, she is not imposing any anti
dumping duties even though, it is within the purview of WTO’s regime of
special and differential treatment as far as developing countries are
concerned. On the contrary she is charging no duties on the massive amount
of agricultural imports for extremely high prices, thereby debilitating the
agricultural economy in India and causing grief to the farmers. This is in
stark contrast to the massive subsidies given by the governments of countries
in the west, especially the USA and EU to their agricultural sector which

1 6 . Supra n.9.
1 7 . Supra n.1.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 35
Critical Analysis of India as a Welfare State

has created an ‘artificial’ comparative advantage in those countries whereby

they are able to produce massive amounts of food grains and other crops
even when they were not naturally inclined or positioned to do so and export
or dump them into developing countries at excessively high prices,
particularly India, being our focus.
The central budget today is 10 lakh crores, but a meager 11,000 crores
has been allocated to the agriculture sector.18 This is the situation when more
than 60% of the people in India receive their sustenance from agriculture. During
1950-1980 there was gradual increase in food grain production, leading to self
sufficiency and status as a prime exporting nation. But10 years post liberalization,
the gradual decrease in food grain production has led agriculture’s share of the
GDP approximated as part of the tenth five year plan to be less than 1%.19
Thus, the WTO that mandated the liberal import of agricultural products
and mandatorily obliged import barriers in the form of tariff and non tariff trade
barriers removed, resulted in the direct reduction of domestic agricultural
production and consumption, as cultivation itself started to prove unprofitable.
Helpless Dependence on Monsoons
Indian farmers’ infamous struggle with the rains is well known and
continues to be a matter of concern every year in the monsoon season.
India is a country with several important rivers that irrigate the lands, but
unfortunately these rivers have not been utilized in a manner that will afford
Indian farmers certain irrigation facilities even when the monsoons fail them.
Even without the full use of the rivers, irrigation facilities in India are not
developed to support the growing requirements of the Indian population
and if the lack of irrigation facilities are added to the increasing woes of
the farmers due to governmental indifference, dangerous policies that are
certain to bring about the end of agriculture as an important sector in India,
Indian farmer has no other alternative but to commit suicide.
According to the International Water Management Institute’s report,
an urgent updating of the ancient irrigation system is required to face the
challenge of feeding an extra 1.5 billion people by 2050 in Asia and India
would most likely have the biggest share of this informed prediction.20
According to Mr. Colin Chartres,-
“There’s very little land….it’s all being used. You cannot expand
literally, therefore you have got to increase productivity on
1 8 . Supra n.1.
1 9 . Supra n.9.
2 0 . 1.Nagpal, Deepak, ‘A Dried-up India and an Agricultural crisis, www.zeenews.com,
(September7, 2009) accessed on 18/11/2010.
36 NALSAR Law Review [Vol.6 : No.1

existing land and it is easier to increase productivity with

irrigation than it is by rain-fed agriculture.”21
Erratic power supply only adds to farmers’ woes as access to water
from water bodies and running of irrigation facilities such as bore wells
etc., are all dependant on power supply. The pattern followed by the
government is actually biased where new industries are provided with
uninterrupted power supply while farmers’ do not know in which crucial
period of production the power will be cut off. There has been a lot of hue
and cry about the unfairness of the erratic power supply where some villages
have been forced to go without any kind of power supply as long as almost
15-20 days!
India’s south-west monsoons contribute to 1/6th of the country’s GDP
from agriculture. Therefore failed monsoons mean that approximately 60%
of India’s farmers depending on rains for agriculture take a severe hit where
chief crops like rice, soybean, sugarcane and cotton are severely affected,
which has in turn raised the prices of commodities like vegetables or pulses
to more than 300% this present year compared to 2008-2009, and has
created an ironical situation where in spite of inflation being in the negative,
for most of rural and middle class India, choosing to consume vegetables
or pulses has become a ‘luxury,’ followed by the fact that the 2009 drought
affected the production of rice, which led to the staggering decline of 10
million tonnes from the previous year’s 100 million tonnes.22
Vicious cycle of Debt and lack of Credit
The most important factor contributing to the mass farmer suicides
in our country over the past at least 12 years that has increased over the
past few years is lack of support in the form of viable credit facilities from
the government. Farmers are forced to resort to seeking the help of
moneylenders who in turn exploit the farmers by demanding quick return
of principle investment at high rates of interest.
Financial institutions do not exceed 25% of farmers’ credit necessities.
The drastic shift in lending patterns of financial institutions has resulted in
institutional finance being extended only to high-tech agribusinesses,
biotechnology and private companies chiefly owned by wealthy farmers at
the expense of small and marginal farmers, who are in dire need of
institutional financing and for the government to come forward to help them

2 1 . Director General of International Water Management Institute, while talking about the
non feasibility of expanding rain-fed agriculture.
2 2 . Supra n. 20.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 37
Critical Analysis of India as a Welfare State

in some small way, especially since the farmers are in a vicious circle of
cyclical debt trap with the virtual extinction of cooperative credit institutions.23
Adding to the complete withdrawal of credit facilities is the alarming
reduction of government investment in agriculture, with the government
choosing to adopt a minimum interventionist approach to coincide with
globalization and privatization. The government investment reduced from
an average of 14.5% during the period of 1986-1990 to 6% during the
period of 1995-2000.24 Furthermore, from the time economic reforms started,
the rate of growth of irrigated lands reduced from 2.62% to 0.5% post
reforms, directly affecting the farmers by drastically reducing their
purchasing power and standard of living, pushing them further into poverty.25
Reduction and Relinquishment of Control in Agricultural Subsidies
Fertilizer subsidy is presently the only minor subsidy that the
government is ready to provide for the farmers, but it is not without loopholes
and extensive corruption. The subsidy provided by the government is at a
drastically reduced rate and is hardly enough to cover the costs of obtaining
them for large scale use. Pesticides have no subsidy governing them and
are obtained by the farmer in the free market at exorbitant prices.
According to Ramesh Chand, an economist, “cutback in subsidy and
control of fertilizers over the last few years has adversely affected the
agricultural sector. It has increased the input costs and made agriculture
less profitable, which is also directly related to globalization.”26 The problems
are compounded by the fact that due to lack of proper regulation and oversight
by the government departments, the farmers are forced to encounter
spurious products especially pesticides that are under the control of
multinational corporations, who do not test their effectiveness either in
preventing crop damage or from an environmental perspective. Spurious
fertilizers and pesticides have been reported to be one of the primary reasons
of farmer suicides as farmers spend excessive amounts of money on their
purchase, only to find them not being effective.27
Right to Life and Livelihood under Article 21 of the Constitution
Article 21 of the Constitution says that: “No person shall be deprived of
his life or personal liberty except according to procedure established by law.”

23. Supra n. 12.

24. Supra n. 9.
25. Supra n. 9.
26. Supra n. 9.
27. Supra n. 12.
38 NALSAR Law Review [Vol.6 : No.1

After the decision in Maneka Gandhi’s28 case, the right to life and
personal liberty of a citizen is protected not only from Executive action but
from Legislative action as well. A person can be deprived of his life and
personal liberty if two conditions are complied with, first, there must be a
law and secondly, there must be a procedure prescribed by that law,
provided that procedure is just, fair and reasonable.29
Ironically, the above holding is applicable in the present case, as the
deprivation of right to life and livelihood of the farmers is not based on any
fair set of directives as the policies under which a farmer is forced to
operate are in turn bringing about his abject downfall, pushing him further
into poverty and providing him with no compensation or ability to continue
to have any kind of livelihood.
In Olga Tellis v. Bombay Municipal Corporation, a five judge bench
of the Supreme Court has finally ruled that the word ‘life’ in Article 21
includes the ‘right to livelihood,’ also. The court said:
It does not mean that life cannot be extinguished or taken away as,
for example, by the imposition and execution of death sentence, except
according to procedure established by law. That is but one aspect of the
right to life. An equally important facet of that right is the right to livelihood
because no person can live without the means of livelihood. If the right to
livelihood is not treated as part of the constitutional right to life, the
easiest ways of depriving a person of his right to life would be to
deprive him of his means of livelihood. In view of the fact that Article
39(a) and 41 require the State to secure to the citizen an adequate
means of livelihood and the right to work, it would be sheer pendentary
to exclude the right to livelihood from the content of the right to life.30
In a significant judgment in D.K. Yadav v. J.M.A. Industries,31 the
Supreme Court has held that the right to life enshrined in Article 21
includes the right to livelihood and therefore termination of the service
of a worker without giving him notice or a reasonable opportunity to be
heard, is arbitrary and illegal. Even when there is adequate evidence giving
grounds for termination, no worker can be terminated without following a
prescribed procedure that should satisfy the requirements of Article 14 and
must not be arbitrary, lacking in reason, fanciful or oppressive. In short it
must be in conformity with the rules of natural justice, Article 21 clubs life
28. Maneka Gandhi v. Union of India AIR 1978 SC 597.
29. Ibid.
30. AIR 1986 SC 180; (1985) 3 SCC 545.
31. (1993) 3 SCC 258.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 39
Critical Analysis of India as a Welfare State

with liberty, dignity of person with means of livelihood without which the
glorious content of dignity of person would be reduced to animal existence.32
The above holding is in stark contrast to the Supreme Court’s previous
holding in the landmark judgment, in Delhi Development Horticulture
employee’s Union v. Delhi Administration, 33 where the Supreme court
essentially held that although right to livelihood is a logical necessary corollary
to right to life, this right has so far not been incorporated in the constitution
as a fundamental right, as India has so far not obtained the capacity to
guarantee it under the constitution. The court further went on to state that
because of the inability of the government to guarantee right to livelihood,
it has been placed in the chapter dealing with Directive Principles, Article
41 which puts forth the aspiration that it is the state’s responsibility to make
effective provision for securing a livelihood, “within the limits of its economic
capacity and development.”34
The above contrasting decisions in a matter of one year by the
Supreme Court is evidence of fact of the realization made by the Supreme
Court of the importance of the right to livelihood and to earn a dignified
living. It is justification of the realization made by the Supreme Court that
although in their opinion India may not be able to guarantee a right to
livelihood, the very right to life would be by all means incomplete and hollow
without the provision that guarantees the right to livelihood that is an
inclusive part of the right to life itself. Hence, now the right to life includes
the right to livelihood and the farmers are positively being deprived of their
right to earn a livelihood with credit facilities withdrawn, forced to sell food
grains at an unscientific support price, lack of public distribution channels,
deprivation owing to globalization and privatization, erratic monsoons and
finally no rescue for the hapless farmer from the government.
Right to Life (livelihood) in present day ‘Welfare state’-Myth or
Reality?
The Directive Principles are the ideals that our government aspires
to abide by and to manifest for its citizens in the form of laws, policy
implementations for their welfare. The directive principles are certain
political, social and economic ideals that are representative of India as a
country based on its history and social fabric, which the government has to
consider in every context, be it a legislative or an executive decision for the
benefit of the people.
3 2 . J.N. Pandey, ‘Constitutional Law of India’, 42nd ed.2005, p. 224.
3 3 . AIR 1992 SC 789.
3 4 . Supra n. 32, p. 224.
40 NALSAR Law Review [Vol.6 : No.1

Dr. B.R. Ambedkar aptly describes the objectives of the welfare

state as follows in his speech in the Constituent Assembly. He said:
[….Now, having regard to the fact there are various ways by which
economic democracy may be brought about, we have deliberately introduced
in the language that we have used, in the directive principles, something
which is not fixed or rigid. We have left enough room for people of different
ways of thinking, with regard to the reaching of the idea of economic
democracy, to strike in their own way, to persuade the electorates that it is
the best way of reaching economic democracy, the fullest opportunity to
act in the way in which they want to act.
…. our object in framing the Constitution is really two-fold (1) to lay
down the form of political democracy and (2) to lay down that our ideal is
economic democracy and also to prescribe that every Government
whatsoever is in power, shall strive to bring about economic democracy.]35
The above sentiment exemplified by Dr. B.R. Ambedkar during the
Constituent Assembly debates is clear indication of the amount of importance
he gave to Directive Principles, acknowledging at the same time that though
they were aspirational in nature they could not be disregarded as the object
of our democracy is not only political democracy but economic equality
and democracy as well. He enunciated the importance of describing India
as a welfare state where the state strives to implement policies keeping the
economic and social progress of the people in mind. Therefore, when India
calls herself a Socialist welfare state, it is true indication of its status as
such, only when the government’s policies are directed towards the welfare
of its masses.
In Maneka Gandhi’s36 case delivering the majority judgment for the
Supreme Court, Bhagwati, J., asked- Is the prescription of some sort of
procedure enough or must the procedure comply with any particular
requirement? He then held that any procedure interfering with the right to
life under Article 21 should be in conformity with equality omnipresent under
Article 14 and should be reasonable with complete lack of non arbitrariness,
where reasons are self explanatory or cogently explained in conformity
with Article 17 of the Constitution.37
Thus the right to life and specifically livelihood under article 21 is
clearly applicable in the present case to farmers due to the fact that their
livelihood which is guaranteed by the constitution of India is in jeopardy.
3 5 . Constituent Assembly Debates, Vol.III., pp. 494-95.
3 6 . Supra n. 1.
3 7 . Supra n. 32, pp. 218-219.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 41
Critical Analysis of India as a Welfare State

They have been deprived of all benefits, institutional help and are now
essentially at the mercy of market forces, coupled with the fact that the
country is being flooded with imported food grains when our own
domestically produced food grains are rotting owing to lack of public
distribution facilities, and corruption of the government officials.
India is essentially an agricultural economy, which has been so since
the time of pre independence. Our country’s proclivity for agriculture and
its natural advantages were well recognized and a golden era in agriculture
was assured in the 1960’s due to the ‘Green Revolution,’ where the planting
of high yielding wheat and rice resulted in the most dramatic successes in
the history of world agricultural economy turning India from a struggling
nation to a dominant player in the food export market. But, the fact that
today an Indian farmer is not even having his basic needs met, by the
government to continue farming, is indication of the dire state that agriculture
is in today.
According to Dr. M.S. Swaminathan, “they (farmers) are cynical
and diffident about the way politicians and governments deal with them.
They are no longer enthused to take farming seriously.”38 Farmer suicides
have today become common place and the government has not taken any
steps to prevent them by granting the farmers some hope or relief in the
form of agriculture friendly policies.
Rural sector employs about 60% of the Indian population and currently
that population is left without any means of survival or subsistence.
Agriculture is seasonal anyways and the people hit the hardest are farm
labourers. Rural employment reduced from 2.07% in the 1980s to 0.66%
during 1993-2000, post liberalization.39 The current crisis in agriculture is in
fact adding to the already prevalent unemployment in India. Critics of rural
labourers and small farmers are of the opinion that more people than needed
are actually involved with farming giving rise to hidden unemployment. But,
the fact of the matter is that today even minimal employment through farming
and agriculture has become extremely difficult.
An example cited is the launch of the multibillion dollar welfare drive
promising 100 days of work for every rural family to battle poverty in the
rural sector, which was a miserable failure, where only approximately 3%
of households targeted received the in famous 100 days of employment
and many for only about 2 weeks. A six month internal audit of the

3 8 . Supra n.1.
3 9 . Supra n.1.
42 NALSAR Law Review [Vol.6 : No.1

programme produced several instances of corruption, inefficiency and funds

misuse. 40
Considering all the above circumstances, I respectfully put forth that
the idea of India as a welfare state is today indeed a myth and not a reality.
The reality of seeing India as a true socialist-welfare state where all the
citizens are adequately provided for was far from reality to start out with,
but the present crisis does not bode well to achieving that aspiration even
in the distant future, if urgent measures to rectify the situation are no taken
by the government.
According to P. Sainath, an eminent journalist and writer, on changing
nature of development debate on food, hunger and rural development-
“An incentive to repay loans on time - which millions of farmers
cannot do - is being passed off as an additional subsidy to the
aam kisan in this budget. And there is still an air of self-
congratulation on the Rs. 70,000-crore farm loan waiver of 2008.
A one-off waiver that comes once in so many decades. Yet
revenue foregone in this budget in direct tax concessions to
corporate tax payers is close to Rs. 80,000 crores. It was over
Rs.66,000 crores last year. And Rs.62,000 crores the year before
that. In all, Rs. 2,08,000 crores of direct freebies in 36 months.”41
Mr. P. Sainath rightfully stresses on the injustice meted out to
agriculture when the industries get the bulk of financial support at the
expense and sacrifice of the most primary sector in India- agriculture. It is
indeed astounding that there should be any question as to the necessity of
the farm loan waiver of 2008, which was in fact late in coming. The growth
rate of industrial sector, information technology and other allied sectors is
approimately12% to 16% whereas agriculture sector is 0.2%. Industrialists
and other businessmen are sanctioned indiscriminate amounts of money in
the form of loans or grants as and when they require by the government,
but agriculturists get only Rs. 10,000/- for an acre and that too only after
the government or the loan sanctioning authority has taken title deeds to
the land as security, essentially forcing the farmer to mortgage the land. In
the last 10 yrs., approximately 2 lakh farmers committed suicide, and there
is no one to hear their cry for help or merely to have a chance to lead a

4 0 . Supra n.1.
4 1 . P.Sainath,‘Yet another Pro farmer budget,’www.indiatogether.com (March 4, 2010)
accessed on 18/11/2010.42. Question propounded by Mr. Bollu Narsimha Reddy, a farmer
’s rights activist, during a speech given in November 2010, as part of the ‘Lok Satta’
enabled farmers movement in Andhra Pradesh.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 43
Critical Analysis of India as a Welfare State

decent life and make a decent living. Is it premature to say in the face of so
much evidence of governmental apathy that the government is essentially
abetting farmers’ suicides?42
Concluding Recommendations
The provision for seeds is extremely important to the farmers,
especially high yielding and hybrid varieties that increase production.
Government is supplying not even 10% of the seeds required owing to
liberalization and privatization, and the prior supply of seeds by State
Agricultural Universities and departments in crops like cotton, chillies and
vegetables have become extinct.43 Private suppliers sell them at exorbitant
prices added to the fact that the seeds are spurious and adulterated, and
the farmers were not given any form of compensation when the seeds they
were forced to buy from private suppliers turned out to be spurious and
damaged crops. Corruption, black marketeering is rampant and good seeds
hardly ever seem to be reaching farmers. It is recommended that the
government should revamp their seed distribution machinery and provide
for government subsidized seeds that reach the farmers through proper
distribution channels, with no middlemen and to stem the corruption that
has become prevalent and provision of the seeds should be in time for the
farmer to use them.
Credit facility for all farmers at low interest rates through institutional
finance is absolutely necessary to remove the ongoing dangerous crisis in
agriculture in India. According to M.S. Swaminathan, the interest charged
should be at a low 4%.44 Appropriate credit facilities through financing at
low rates of interest by nationalized banks giving farmers enough time to
be able to repay them from the sale of their harvest is crucial to saving the
farmers from more suicides owing to vicious cycle of bad debts.
Fertilizers and pesticides should be provided by the government at
subsidized rates so that the farmers do not have to go through private sellers
and be defrauded and stranded with spurious materials. The government
should set up proper machinery to enable farmers to obtain good seeds,
fertilizers and pesticides without having to worry about corrupt practices
or spurious products, through international standardization of products and
a strict oversight and regulatory body to over see their functioning.

4 2 . Question propounded by Mr. Bollu Narsimha Reddy, a farmer’s rights activist, during a
speech given in November 2010, as part of the ‘Lok Satta’ enabled farmers movement
in Andhra Pradesh.
4 3 . Supra n.12.
4 4 . Supra n. 9.
44 NALSAR Law Review [Vol.6 : No.1

Agriculture mechanization, starting with proper irrigation facilities should

be a priority for the government to increase production and reduce
dependence on uncertain monsoons.
The Public Distribution system (PDS) is in dire need of overhauling
and fresh impetus from the government. The PDS is divided into ‘Below
poverty line’ (BPL) and ‘Above poverty line,’ (APL). This differentiation
has in recent times made agricultural goods expensive, when sold even
through ration shops and subsidized owing to the staggering increase in
costs of production in agriculture.45 This has led to accumulation of food
grains in godowns with no buyers, where the food grains are rotting and
the government that procured them is not open to distributing it to the hungry
masses not able to afford the food grains. A systematic and detailed system
of distribution of food grains should be reintroduced, so that the farmers do
not have to deal with middlemen or be forced to sell their food grains in
open markets at prices much lower than their investment.
Crop insurance or lack of it is an important issue that the government
has failed to address or implement in India. There is hardly any crop
insurance and the barely available crop insurance covers hardly 10% of
the crops.46 This year there has been an excess of rainfall with flooding in
several states, where the rains actually destroyed crops ready for harvest.
The farmers lost tremendously due to this event with the government not
coming to their rescue anytime soon. Farmers need to absolutely be
protected from such calamities as drought that has plagued India for the
past few years and the floods that have been evident this year. Crop
Insurance schemes should be religiously and effectively implemented to
protect against declining productivity, crop failures from droughts, floods
and other calamities. This is an important means to stop farmer suicides as
he will have been protected in any eventuality.
Either MSP has to be done away with, or it should be decided on
scientific basis based on practical implications of cost of production, which
will enable the farmers to get remunerative prices, and the recommendations
of MS Swaminathan and his Commission should be implemented.
Importantly, agriculture is the most primary and essential sector in India
and the government cannot ignore that or take the approach of ‘a horse
with blinkers,’ anymore. Merely because in the past few decades information
technology and industries have afforded more profits does not mean that
the most primary and basic sector should be undermined. Had agriculture
4 5 . Supra n. 9.
4 6 . Supra n.12.

4 7 . Supra n. 9.

4 8 . Supra n.1.
2011] Crisis in Indian Agriculture a Temporary Economic Phase: 45
Critical Analysis of India as a Welfare State

been given similar incentives and impetus as IT and industry, we would

have seen the same kind of booming profits that marked the golden era of
the ‘Green Revolution.’ Therefore, it is high time that agriculture be given
the same kind of impetus as industry through various government sponsored
programs.
The ill effects of globalization and WTO should be reversed and
implemented in the manner that was actually the initial aim of WTO, i.e., to
safeguard the natural comparative advantage of member countries. The
special and differential treatment provisions in favor of developing countries
should be utilized and our natural comparative advantage in agriculture
sustained and renewed. Restrictions in the form of tariff and non tariff
barriers should be reinforced and the agenda of the WTO should be carefully
introduced keeping India’s special interests in mind. WTO required
restrictions to be ‘phased out,’ over a period of time, but the special needs
of India as a developing country should be considered and the policy of
special and differential treatment should be used to increase and encourage
export and reduce imports of primary products.
According to Dr. M.S. Swaminathan
In a country where 60% of people depend on agriculture for their
livelihood, it is better to become an agricultural force based on food security
rather than a nuclear force.47
If you compare an employee in any sector and a farmer there is a lot
to be wanted. Employees get benefits and raises based on inflation, have
fixed hours, credit facilities and housing loans, retirement at 58 years of
age, pensions thereafter, provident funds, gratuities and all kinds of other
benefits while working, in the form of traveling allowance, scheduled number
of holidays that only increase with the number of years of service etc. But,
a farmer has none of these.
The UPA government came to power just as very previous
government on the manifesto of ‘Garibi Hatao,’ ‘Aam Aadmi and Kisan’
slogans, but our Prime Minister Manmohan Singh himself at a recent press
conference was of the ill informed opinion that the dependence on
agriculture for employment should be reduced from 60% to 15%-20%.48 In
a country like India where the very sector of agriculture is today in dire
crisis, where will the ‘barely employed’ farmers go? A farmer who sweats
and slogs in the fields to feed us and his family, can lay claim to no such
luxuries as other employees. In fact he has to deal with seasonal
46 NALSAR Law Review [Vol.6 : No.1

uncertainties, crop failures, small incidental expenses of modernization like

travel or modern implements for better production, deaths in the family,
education, and sustenance of family and can never retire…Is it fair that
we deprive him even of the basic necessities to make a decent livelihood?
2009) accessed on 18/11/2010.