Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission, recounted the time when the Modi government had to roll back the farm reforms in 2021. Ahluwalia said that the reforms were the need of the hour, but there were gaping flaws in their implementation.
In a recent interview with The Tribune, the former Deputy Chairman of the Planning Commission detailed how the government could have gone about implementing the agricultural reforms instead.
Ahluwalia said, “They were correct. It’s a different matter that they were not handled with enough discussion. In fact, what happened was that it was a mistake to try and rush them through as an ordinance. Had the government taken this view that this is a very sensitive issue. We are circulating a discussion paper. Maybe, ask the NITI Aayog or whatever it is to have a discussion with farmer interests, both in Punjab and UP and Haryana and so on. And in the south. And then come up with a considered view.”
He further described the political situation around the laws as “frozen” while expressing uncertainty about whether the issue would become “unfrozen” following their repeal.
Why is Ahluwalia so positive on the now-repealed farm laws?
Montek Singh Ahluwalia is positive on the now-repealed farm laws because the legislation gave farmers the legal right to sell their produce directly to private players, processors and retailers at ‘farm gates’ or anywhere outside the state-regulated Agricultural Produce Market Committee (APMC) mandis.
If the legislation were passed, farmers would have had to pay zero taxes on sales outside the APMC mandis’ physical premises. These sales would also not be subject to state-imposed market fees, cess or levies, implying increased net profits for farmers.
Farmers could have been able to trade across state borders, helping them to find the highest bidder rather than being restricted to local markets. The laws provided a framework for contract farming, wherein farmers would’ve been able to strike agreements with agribusinesses or large retailers before the sowing season.
Why did the government roll back farm laws?
The three farm laws passed in 2020 were repealed as they triggered year-long protests across northern India, with Prime Minister Modi officially announcing the same in 2021. Farmers, primarily from Punjab and Haryana, feared the laws would dismantle the government-regulated wholesale markets and abolish the Minimum Support Price (MSP) system.
Moreover, there was also political pressure with state elections scheduled at the time in Punjab and Uttar Pradesh, prompting the BJP to concede ground.
The Centre passed the Farm Laws Repeal Bill, 2021, to formally roll back the legislation. The government agreed to form a committee to address the concerns around MSP.
