Policy decisions in tune with the neo-liberal agenda actively supported by the World Bank alienated large sections of people from the S.M. Krishna-led Congress government in the State.
SPEAKING to the media soon after it became apparent that the Congress was heading towards a major defeat in the State Assembly elections in Karnataka, Chief Minister S.M. Krishna attributed its poor performance to two factors. The first, he said, was his own miscalculation in calling for Assembly elections simultaneously with the Lok Sabha elections, even though the State Assembly had six months to complete its five-year term. The so-called "Vajpayee wave" that influenced the Lok Sabha voting pattern also influenced the way people voted for the State elections, he said. The second factor responsible for the extremely poor performance of the Congress, he said, was the drought that had affected large parts of the State in four out of the five years of his government's tenure. "Drought has always been a cause for people to vote against the government. Look at what happened in Rajasthan in the last elections," he said. The Chief Minister also agreed that there was a need to "introspect" on the "urban bias" that informed governance during his tenure.
If the introspection that the Chief Minister promised does take place, it will uncover the reasons for a near livelihood crisis that a majority of people in the State, particularly in the rural areas, faced during his government's tenure. It is a crisis that will continue unless it is squarely addressed by the new government. Drought only exacerbated the impact of several policy decisions implemented by the Krishna government. The State has experienced droughts of greater severity in the past (the drought of 1985-87 being a case in point): never, however, did the phenomenon of suicides amongst debt-ridden farmers - perhaps the most chilling manifestation of the crisis - take place in such large numbers and over such a wide geographical area.
The promised introspection will surely also take into account the reasons for the failure of the government and its machinery to see the seriousness of the agrarian crisis. The government, for example, was in denial over farmer's suicides for a long time.
When the problem surfaced in the media and could no longer be ignored, government spokespersons first contested the numbers. (Although the media was only quoting from official sources; 650 farmers had committed suicide in the previous 10 months, according to a release from the office of the Development Commissioner in March 2004. Not a week passed without the newspapers reporting cases of suicide from different parts of the State.) The government then argued that the deaths occurred for reasons other than indebtedness. An official commission of inquiry set up by the Congress government actually listed alcoholism as the reason for the majority of suicides. When the government finally acted on the problem by announcing a compensation package of Rs.1,00,000 for the families of suicide victims, the criteria for eligibility were so unrealistic that barely 10 per cent of needy families actually received compensation. Some official spokespersons were quoted as saying that farmers were committing suicide because of the compensation package. If this were indeed true, it would have been a telling commentary on the degree of desperation that farmers had been pushed into.
Krishna's image as a savvy, pro-big business head of government was next only to that of his counterpart in neighbouring Andhra Pradesh, N. Chandrababu Naidu, who was routed in the elections after nine years in power. As in Andhra Pradesh, the mainstream media in Karnataka too played a critical role in fostering that image and in celebrating it. Krishna, and by extension the government he headed, was eulogised for his proactive role in pushing Bangalore into the league of fast-paced, globalised cities, and in fostering the growth areas of information technology and biotechnology. Starry-eyed about a government that was aggressively in favour of economic reform, the media tended to ignore the impact of the government's policies on the rural areas, in small towns, and even on the poor in big cities like Bangalore. Once elections drew near and the scent of a massive anti-incumbency mood was in the air, the Karnataka government tried hard to fulfil some part of its mandate to the people by announcing a series of sops - too little, too late.
REFORMS in the power sector, an essential component of the conditionalities that came with the Karnataka Economic Restructuring Loan (KERL) from the World Bank, was a major reason for rural anger and discontent against the Karnataka government. The first tranche of the loan of $150 million (approximately Rs.720 crores) was sanctioned by the World Bank to the government in 2001. In order to be eligible for the loan the government had already initiated a package of fiscal and governance reforms. The Bank had identified the power sector as an area where reforms were essential. "The ultimate objective of the power sector reforms is for the government to withdraw from the power sector as an operator and regulator of utilities," the Bank noted in a report dated May 25, 2001. The government passed the Electricity Reform Act, 1999, and the Cabinet approved a reform policy in December 2001 that drew a privatisation map for the power sector. The government also set up the Karnataka Electricity Regulatory Commission (KERC). Although it committed itself to the privatisation of power distribution by 2002, it was an objective that it could not achieve.
The vote against the Congress was in large part a rejection of power sector reforms in agriculture. The Krishna government unbundled power distribution by setting up five government-owned distribution companies in the State. Power tariffs were hiked significantly over five years, although the collection of dues varied over different regions of the State and was often dependent on the strength of farmers' organisations in resisting such payments. For example, in the Ramdurg taluk of Belgaum district, the tariff on pumpsets was hiked from Rs.300 to Rs.540 per horsepower per month once the distribution company for the region, was set up. Those who did not metre their pumpsets were threatened with a Rs.50,000 fine and imprisonment by the Hubli Electricity Supply Company, which in addition set up a "Pulikesi Brigade" to implement the order. Farmers organised themselves under the Belgaum District Pumpset Owners Association, and retaliated by setting up the "Sangoli Rayanna Brigade" to counter this draconian order. They publicly burnt bills for arrears of Rs.70,000 to Rs.80,000, which they were suddenly saddled with, and resisted the attempts by the "Pulikesi Brigade" to disconnect non-metred pumpsets.
The Bhagyajyothi and Kuteerjyothi schemes of subsidised power for poor rural homes were reorganised with monthly costs raised from Rs.10 to Rs.30 and homes metred. This pushed up the cost of living for poor families. Free power for agricultural pumpsets was withdrawn. Faced with the failure of crops owing to drought, and caught in the stranglehold of debt incurred for agriculture, poor farming families were then presented with bills for electricity arrears that ran into thousands of rupees. Several of the cases of suicide reported in the media were of farmers who, suddenly confronted with a fresh payment burden from the Hubli Electricity Supply Company, decided to end their lives.
The most telling comment on the power scenario comes from Phillipose Mathai, the present Chairman of the KERC. "The Karnataka regulators have always pointed out that in the power sector, justice was not being done in the rural sector at all," he said. "It has always pointed out that farmers were not being supplied with reliable, or any power, even for three hours a day... Any reform cannot overlook the concerns of the poor, especially the rural farmers."
DROUGHT only added to the plethora of burdens on rural homes. The increase in power tariffs, the reorganisation of the public distribution system, which excluded large sections of the poor, and the sudden increase in the costs of cultivation owing to the lifting of subsidies on inputs like fertilizers, drove farming families ever deeper into debt.
It is in such a situation that the State government reduced food subsidies to Rs.170 crores in 2003-2004 from Rs.295 crores in 2000-2001. In its Medium Term Fiscal Plan, the State government claimed success in weeding out "bogus ration cards" and in reducing the number of ration cards from 62 lakhs to 42.7 lakhs.
In a recent article on agricultural credit, former Chief Minister M. Veerappa Moily noted: "Most suicides are by small farmers who owe between Rs.50,000 to Rs.70,000 to private moneylenders, whereas his debt to the bank or cooperative society is minimal. It is also a matter of concern that unlike former days, the poorer farmers are struck off from the BPL [below poverty line] category, thus becoming ineligible for subsidised food. It is because of these reasons that a single year of drought or crisis can drive poor farmers into total desperation."
Small farmers deeply in debt to private moneylenders constituted the largest segment of suicide victims. The withdrawal of bank credit to the agricultural sector, and to poor farmers in particular since the late 1990s, is well-documented. Nationalised banks have not opened any new branches in the rural areas in the last five years, and rural branches have been shutting down in this period. The Banking Service Recruitment Board (BSRB), set up for the recruitment of clerical cadre in banks, was abolished by the National Democratic Alliance government, as were the posts of rural development officers in rural branches. In March 2000 in Karnataka, the total number of rural banks was 2,250, a number which came down to 2,201 in March 2002. Agricultural advances to total advances from banks decreased from 21.38 per cent to 18.86 per cent in the same period. This went up again to 19.5 per cent in December 2002, but largely on account of corporate agricultural loans.
The only scheme that brought the government some dividends was the mid-day meal scheme for primary school children in government schools. This excellent and largely well-administered scheme was gratefully acknowledged by rural voters, although it did not always compensate for perceived failures on other fronts. It was, ultimately, the rural voter who delivered the verdict on the efficacy of the State government's economic reform policies.
