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Indian Economy : A Detailed analysis of the Current Scenario: Farmer Suicide

Introduction:

             Is it frugal for farmers to suicide? The answer is a definite "NO" . We all believe that the reason for increasing farmer suicides is in fact correlated to the political agenda of opposition parties to gain ground in the political field. Yes , well you see that in the state of Punjab, one observed severe farmer suicidal problems just before the state assembly elections, didn't we? But after the Congress was elected to power these uprisings were simply shunted out of form. Why so much of hostility against BJP? Why is the Congress playing such vendetta politics? These issues are to be discussed at Aadhimarg group's blog below.


1. Inflationary disaster:

                In India specially after the demonetisation scheme our inflation numbers have been drowning . I presume that all of you know the fact that when our inflation reduces , our country's growth reduces. Yes, it is absolutely true. The costs of commodities tend to have a sharp decline. You guys see it? Well I presume that you wouldn't be seeing it. The reason is basically that "humans are selfish", they don't lower the prices according to the current scenario . May 2017 the inflation rate was a mere 2.18 % compared to the previous year's May month's rate of an approximate 6 % . This lowered rate of inflation is a disaster. The reason is....
           In India , since inflation is low the people's pockets do not get any heavier i.e the value of increase in salaries will be lowered to a mere 2.18% (directly proportional to inflation) . So when this happens one can easily fight inflationary developments in our country. Ironically, in India the vegetable prices do not tend to move in apposition to the inflationary rates , in other terms the middlemen make more money by charging higher prices from consumers and paying a really less amount to the agrarian farmer . So, here is the issue, the farmers as well as the consumers suffer from this problem.

          The consumers will have to pay an amount equal to the inflationary rate to the seller thus increasing his spending and the farmer sells it at a lower rate making it hard for him to crack the nutshell i.e the input prices increases due to inflation but his selling price decreases due to middlemen pushing the farmer to an ambiguous situation or indirectly forcing him to fall into a vicious debt trap.

2. Economic Disaster :

                 This is an important issue now. Well in the year of 2008 the UPA government waived of the loans for marginal and small farmers . It was called the Agricultural Debt Waiver Scheme, this scheme costed an estimated amount of 500 billion rupees and further figures rose to 600 billion rupees. This scheme propelled the Indian National Congress through the elections and helped the UPA win the 2009 elections . Soon enough an Indian  economist, the Prime Minister of India Mr. Manmohan Singh supported this scheme. But , then his thought was political. In Aadhimarg's apolitical analysis we figured out that this move was a total wiped out disaster . Well this is because in the year of 2009-10 the banks' non-performing assets rose three-fold . The reason behind this was the writing off of bad debts. According to the study by the World Bank it was actually worse , were its report concluded that fiscal discipline was turning incorrigible in the Indian state.  Farmers who used to payback their loans started wantonly, now started defecting , expecting a waiver soon or less in the next fiscal. Thus increasing the bad debts even more.
         So when bad debt increases, banks have a burden to convert them pushing them to focus more on the profits. Then in a specific time frame the banks will have to stop providing loans for the farmers , thus forcing them to suicide. Hence, Farm Loan Waiver is never a good initiative, for this a remedy but not a cure. In India  more than 50% of the farmers don't borrow from instituitional banks but from landlords and third-party finance consultants who do not comply with the RBI set terms. This makes the rich richer and the farmers poorer thus leading to bankruptcy and other problems.

3. Political Motive:

         In the state of Madhya Pradesh, recently there were protests by farmers demanding a loan waiver . Well these protests stemmed out because the Uttar Pradesh's Chief Minister recently announced a loan waiver for marginal farmers which enticed other farmer states to do so too. Moreover, the Indian National Congress party and its members wanted to gain ground by causing disruptions against the current government . Well after the U.P election results were out even the opposition parties ceded to the truth that the BJP with its popularity will win the 2019 elections. True isn't it? But after the recent economic turmoils were the BJP shunted out decisions like G.S.T which raised fears amongst businessmen about the economic scenario, where dying inflation rates caused chaos in the markets and stabbed the poor right in their back.The conclusion is gloomy. These parties have forced the farmers to cause widespread havoc in the subterranean regions of India , only to gain a political ground by mystifying facts and data.
The Congress President visiting farmers in the state of Punjab before elections

So only when the Congress party stops interfering with the protests of the farmers will this problem end. The farmers will start walking straight upright and stop depending on political parties to soothe their freebie demand.   

Conclusion:

               The problem of Farmer suicide is a cause not to be dealt easily with but to be reckoned with utmost adeptness . If we want to increase the inflationary rate we should start spending much more than average . Only government spending is currently running the Indian Economy. The inflationary problem can be overcome only when the chain of spending rises, when farmers do not default loans explicitly. If you want to stop our farmers from killing themselves, I request you to do one simple task , please buy products directly from farmers rather than buying them from 3rd party stores. Young minds of our country can improve demand by improvised spending , please increase your spending on important stuffs which are predominantly agricultural or made in India. Please focus on the core problem of solving the issue of inflation by participating more on awareness programmes, requesting your colleagues, friends and others to directly buy from the farmer rather than from middlemen. Only this will balance the weight of inflation and deflation. And finally I am pretty happy that one important scheme , the GST reform will definitely increase the inflation in the upcoming months balancing the gap. Moreover when you observe with conditional sense we at Aadhimarg arrived at the presence of a linking between Demonetisation scheme and GST, for demonetisation will reduce inflation and GST will indeed increase inflation causing a balance in a time period of two or three months.

I never lose hope in him, let us trust him for one reason. The reason being GST

   If Modi had announced GST without a demonetisation scheme our economy wouldv'e witnessed ever rising inflationary rates. But with demonetisation this man has filled the vials of inflation as well as deflation. Yes, this is afar the most reasonable conclusion that can be derived.
So let us all hope the best out of GST reform and I once again request you all to spend more and buy directly from the farmer rather than the sellers to rejuvenate our economy.  Yes we are going to see wonders soon . Jai Hind! 

Note: Any errors please report, you will be rewarded