FINANCE

Modi’s U-turn in agriculture law reflects concerns over the upcoming elections


Narendra Modi never admits wrong, even when Indians suffer because of his policies. But the Indian prime minister made a rare apology last week when he made a stunning reversal by promising to repeal the controversial farm law after a year of protests.

Modi maintained that agrarian reforms – aimed at opening up markets for greater corporate participation – would increase farmers’ incomes. But he acknowledged that his Bharatiya Janata Party government had failed to reach a consensus on change, which could have consequences for millions.

In a special television broadcast, Modi said, “I want to say with a pure heart that maybe there was something wrong with our efforts that we could not explain to some of our peasant brothers a clear truth.”

The Prime Minister’s sudden decision to reverse one of the biggest economic reforms of his second term came after a long political stalemate with farmers, who have been blocking highways in New Delhi for a year in a show of strength.

Analysts say Arohan reflects the ruling party’s growing concern over the possibility of next year’s elections in Uttar Pradesh, India’s largest state and stronghold of the current BJP. The results of that vote will set the tone for a nationwide general election in 2024.

The landslide victory of the BJP in the state elections in UP in 2017 helped the party to project the image that it was an irresistible gamble to win the 2019 general elections. Modi’s party hopes to come up with a similar idea next year, which will help raise funds and line up disgruntled allies.

But farmers in Uttar Pradesh, especially in the more affluent western region, have become the driving force behind anti-agrarian protests, raising the possibility of them leaving the BJP. The disappointing defeat in the West Bengal state elections in May will already be another blow for the party.

“The election will be held as an interim referendum in the second term of the Modi government,” said Milan Vaishnav, director of the Carnegie Endowment for International Peace South Asia program. “They don’t just want to shout – they want to come up with a push and create an aura of invincibility.”

Narendra Modi at a public meeting in West Bengal earlier this year

Narendra Modi campaigned in West Bengal before the state assembly elections this year but his Bharatiya Janata Party was stunned by the tragic defeat © Diptendu Dutt / AFP / Getty Images

Modi’s farm laws sought to open up India’s strictly regulated agricultural markets to greater corporate participation, allowing companies to buy directly from farmers and setting contract farming conditions. The Prime Minister argued that it would free the peasants from exploitative middlemen and give them more freedom to do business.

But influential landowner farming families – who have prospered by selling essential crops to the government at fixed prices – feared that the laws would play a role in ending the state’s collection model and weaken their strong corporate interests.

Modi’s surrender to the peasants will tarnish his carefully respected image as a tough leader impenetrable to public criticism. But Vaishnavism said the benefits of changing courses would probably outweigh the costs due to the upcoming UP elections in Punjab and new political opportunities, where the ruling Congress party has recently split.

“It’s smart politics,” he said. “The BJP is looking forward to two crucial elections next year where anti-peasant rhetoric, big business and the oppression of the poor are likely to take a toll. It basically allows them to put their talking points in bed. “

One person holds a sign that reads: We are not farmers, we are terrorists

Modi and BJP have branded farmers as patriotic terrorists despite making the sector an important constituency © Altaf Qadri / AP

But many doubt that Modi’s pre-election mask will immediately restore his one-time high popularity in an influential 200m state constituency. Protesters suffered serious inconveniences during the standoff, which sometimes led to violent clashes with police. Modi – and the BJP’s social media operations – have haunted the peasantry as patriotic terrorists and professional protesters who are undermining the country’s progress.

Economists have also warned that the catastrophe of the proposed reforms could be a long-term push for modernization of India’s agricultural sector. Many say a comprehensive overhaul is needed to improve the economic and environmental sustainability of the industry.

“The worst possible outcome would be if people say, ‘Agriculture is too hot a potato and you can’t touch it,'” said Mekhla Krishnamurthy, a senior fellow at the Center for Policy Research, a think-tank in New Delhi. . “It needs deep reform.”

The manner in which the BJP passed bills through Parliament during the Covid-19 epidemic, with little public consultation or scrutiny, reinforced suspicion and provoked a backlash. The BJP’s longtime ally in Punjab also severed ties with Modi over the proposed law and left the government.

“The damage is profound,” said Debesh Kapoor, director of the Asia program at Johns Hopkins University’s School of Advanced International Studies. “It’s not a switch shake. The protests have been going on for more than a year.”

Tasting victory, farmers want to push for more concessions, such as the inclusion of a guaranteed public procurement system – at a minimum price – in the law, which will lead to an increase in already expensive agricultural subsidies, which some say is misguided.

“Farmers have won, but they will not clear the border until all their demands are met,” the Indian Farmers Union or Indian Farmers Union tweeted on Sunday.

But Kapoor said Modi’s strategic retreat was “an olive branch” that would enable the BJP to begin rebuilding its support in a strategically important constituency in an influential constituency where political opponents remain fragmented.

“You don’t have to win all the farmers. . . You have to win them enough, ”he said. “The BJP is going to take home the message that ‘the prime minister never changes his mind, he sticks to his policy, but he did it because of you’. Some farmers will now give him the benefit of the doubt. ”



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