Populism and Reform - Why one trumps the other?

People, in general, are uncomfortable with sudden changes. An established habit is hard to overcome. We sometimes get used to the comfort zone so much that it makes us revolt against the agents of change. No marks for guessing the author's garrulousness about change is about ongoing farmers' protest on recently enacted farm bills.  

Please stay on then because the author does not intend to bore the reader by explaining what APMC is or why MSP must be withdrawn gradually by the government. These are already well explained in detail by countless articles, since the enaction of farm bills. The discussion here is about the disjunct between progress and reforms.

Who does not like to see our country developed? With one of the youngest populations in the world, we seem impatient for change. We want to see poverty eradicated and our population educated. We aspire for a $5 trillion economy and expect our farmers' income to double. Why is it that when there are reforms, protests erupt?

Eminent scholars such as Prof. Ashok Gulati argue that the government has not communicated well about the farm laws to the farmers.  While Indians laws, in general, are notoriously arcane, the farm laws are not complex trigonometry to be understood. Whatever rational arguments the government may have to defend its farm laws, it cannot appeal to farmers because they have been pampered by the government, since independence.

Let us go deep further. Politicians persist in relying on targeted transfer programs and subsidies. Poor farmers might prefer targeted transfers rather than public services such as education because farmers are more attracted to tangible benefits. This behaviour is partly due to a lack of credibility of political promises to provide broad public goods (as opposed to private transfers and subsidies). (https://doi.org/10.1257/jep.34.1.31.)

At this juncture, if the government realizes that it had been a nanny state throughout its existence and had never let its citizens fend for themselves, it finds its children(citizens) revolting against it.  Since the economic liberalization, the government has transformed itself from being a Socialistic state to a regulating state. This transition comes with some frictions, as India had been a welfare state for most of the time since independence.

The farmers' trust issue with government is understandable as their past experiences are not satisfactory. However, it is in their best interests that these reforms have been enacted. Punjab was one of the richest states in India, during the time of the Green revolution. Now it is steadily ceding its ground to other states.  Agrarian economies have their limits and cannot generate incomes boundlessly. It is time for Punjab to start diversifying its economy and this may be the opportune moment.




 

 

 

 


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