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LATEST NEWS UPDATES | Economic Survey: Rural job freeze plan leaves Jairam fuming

Economic Survey: Rural job freeze plan leaves Jairam fuming

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published Published on Mar 16, 2012   modified Modified on Mar 16, 2012
-The Economic Times
 
Could the Centre freeze the job guarantee scheme during peak agriculture season? 

The controversial demand from the agriculture ministry found an echo in the Economic Survey released on Thursday, but was quickly dismissed by rural development minister Jairam Ramesh. While lauding the flagship scheme, the survey listed a few other measures as the way forward. "While the overall performance of MGNREGS has been good, there is scope for improvements like focused planning, shifting to permanent asset and infrastructure building activities.... avoiding peak seasons in agriculture," it said. 

The demand to freeze the job scheme stems from the complaint that it has made farm labour both expensive and scarce, but social activists and the rural development ministry have rebuffed it as untrue. 

Labourers are said to prefer work under MGNREGS, which assures them of a higher minimum wage and draws them away from big farms. The landlords have had to wean them away from the job scheme with higher wages, further escalating their input cost for agriculture. 

Even agriculture minister Sharad Pawar wrote to the prime minister to suspend MGNREGS during the farm season. However, Ramesh dismissed the possibility. "The matter has been examined in detail by the Mihir Shah Committee and rejected," he said. 

The job scheme was praised by the survey for giving additional income to the poor, thereby creating additional demand for consumer durables/nondurables "to sustain the supply side". It hinted that the positive came at the cost of food inflation because of higher demand of foodgrains while production was low. The survey also called for extending the job scheme to urban areas. While it had been a Congress poll promise, the government had not shown any initiative in that direction. Sources said it was unlikely that the UPA would undertake such a spending exercise when fiscal constraints were strong. 

Farm sector's share in GDP comes down 

The contribution of agriculture to gross domestic product (GDP) dropped to 14.5% in 2011-12 from 14.7% in 2010-11 with the country missing the 4% growth target for the sector under the 11th five-year plan to clock 3.5%. Portending greater crisis ahead was the fall in the total land under foodgrain cultivation even as the yield for crops plateaus. The area under food crops dropped to 1,254.92 lakh hectares in 2011-12 from 1,267.65 lakh hectares in the previous year. 

The survey advocated regular import of agricultural commodities in relatively smaller quantities with an upper ceiling to be decided annually. The survey also advocated that perishables-vegetables and fruits-be taken out of the Agricultural Produce Marketing Act entirely. It also pushed the case for FDI in multi-brand retail as a way to increase investment in the supply chain.


The Economic Times, 16 March, 2012, http://economictimes.indiatimes.com/news/economy/indicators/economic-survey-rural-job-freeze-plan-leaves-jairam-fuming/articleshow/12287355.cms


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