The reforms initiated by the Narendra Modi government seems to have received a temporary setback with the Supreme Court staying the implementation of the three agricultural laws and setting up a four-member panel of experts to talk to a section of farmers, mostly from Punjab and Haryana, who are in the forefront of an agitation.
The farmers’ agitation is the second major protest against the Narendra Modi government by two sections of people within a span of one year, the first one being the anti-Citizenship Amendment Act campaign.
While Shaheen Bagh in Delhi was the epicentre of the anti-CAA protest, and was primarily led by Muslims, the farmers protest saw the participation of people mostly from Punjab and Haryana. In the case of the anti-CAA stir, the communal riots in Delhi in February and the Covid-19 pandemic put an end to it. In the case of the farmers protest, the initiative to break the ice came from the Supreme Court as several rounds of talks between the Centre and the farmers remained inconclusive with both sides sticking to their stand.
Though the Narendra Modi government had stood firm during several reforms –whether the implementation of GST, demonetisation, repeal of old labour laws or Citizenship Amendment Act, the intervention of the Supreme Court in the latest agitation has come as a bolt from the blue. Modi has already acquired the credentials of the biggest reformist PM after former Prime Minister Narasimha Rao who unleased the liberalisation regime with Manmohan Singh as his finance minister.
In its first term, the Modi government had undertaken big-ticket reforms like GST, the transparent auction of natural resources, RERA, and the revolutionary establishment of the DBT regime.
In the second term, a slew of big bang reforms such as mega bank mergers, reforming myriad labour laws and merging them into four well defined labour codes and the lowering of corporate tax rates to among the lowest in the world were announced and implemented.
Once the Modi government replaced 29 old labour laws to make labour markets far more flexible and employment friendly, the next set of reforms was aimed at ending the long worn-out practices in the agriculture sector, as pointed out by M S Swaminathan Committee. While the UPA governments had no political will to implement the Swaminathan Committee report, on which nearly 60% of the country’s population is dependent, the Modi government boldly made the move.
The government soon legislated three laws — 1) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 2) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and 3) Essential Commodities (Amendment) Act, 2020 — as part of a broad strategy to reform the agriculture sector.
While the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act seeks to facilitate barrier-free trade of farm produce outside the markets notified under the various state Agriculture Produce Market Committees (APMC) laws, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, define a framework for contract-farming.
The Essential Commodities (Amendment) Act, removes stock limits on agricultural produce to enable merchants to directly purchase produce from farmers in large quantities in times of bumper harvests.
However, a section of farmers, fearing that the new laws would usher in big corporate groups into agriculture produce markets, started strongly opposing it. They believe that the new laws could create monopolies, allowing them to fix prices at low levels, hurting farmers.
However, the government has said that the new central law will enable farmers to sell their produce at attractive prices, remove barriers in inter-state trade, allowing farmers from one state to sell to buyers and merchants in another state through an e-trading framework.
The Narendra Modi government, which has been harping on removing procedural hurdles right from the beginning, is unlikely to bulk under pressure. The reforms that it have been pursuing consistently, are likely to go on despite occasionally hitting speed bumps.