Nirupam opposes withdrawal of agro subsidy

KOLKATA: Economists like Amartya Sen and Bibek Debroy may suggest otherwise, but West Bengal industry minister Nirupam Sen is opposed to withdrawal of agricultural subsidy.
He argued that the food security of the country would be in danger if agricultural subsidy was withdrawn.
"In the wake of reduction in subsidies on water, power and fertilisers, the cost of cultivation would become high.The peasants will stop producing if they do not get subsidy in the form of procurement price," Sen said, complaining that the FCI discriminated against small peasants of the state while favouring the powerful farm lobby of the north.
Outlining the Left Front government’s expectations from the Union Budget, he favoured more protectionist measures for small farmers and for the crisis-ridden jute and tea industries of the state.
Pointing to the financial crisis of the states due to the staggering salary bills and massive interest payments to the Centre, Sen said that the growth targets fixed in the 10th Plan would remain unattainable unless the Budget made provisions to offload the states’ debt burden.
"The states have little money left for plan or development expenditure as we are compelled to spend more on unplanned expenditure. The country cannot attain growth unless the states are redeemed," he said. West Bengal owes more than Rs 70,000 crore to the Centre while it had to cough up around Rs 8,000 crore for debt serving this year.
According to him, West Bengal’s achievement in generating massive investment in the small savings scheme had turned into a "liability" because of Central policies. The Centre gave back only a share of the total deposit as loans to the states for development at an interest higher than the market rate.
Though the Centre has agreed to earmark a certain amount of the deposit for debt swapping, the states have demanded a larger share and reduction in the interest rate.
Sen demanded an increase in import duty on foreign tea and quality restrictions on cheap Sri Lankan or Kenyan tea and a simultaneous reduction in excise duty to save the domestic tea industry. Of the state’s 343 tea gardens with 300,000 workers, many are closed and their workers are facing starvation.
Jute is also in crisis following the loss of market to cheaper Bangladeshi products. Sen wanted the Budget to stick to the protectionist measures like 100 per cent use of ‘eco-friendly’ gunny bags in foodgrain and sugar industry as well as maximum possible use in fertiliser and other industries. Thirty-two of the 63 jute mills in the state are sick. "The Centre’s move to dilute compulsory use of jute bags in industry would spell doom for 25,000 workers and four million jute growers," Sen commented.
In the interest of the Haldia Petrochemicals, he wanted a reduction in the import duty on naphtha, required as input, and an increase in that on polymers, its output.
With the return of investors in the iron and steel as well as ferro-alloy sector in West Bengal, Sen is facing the problem of inter-state protective tariff barriers from states like Andhra and Chhattisgarh.
These states have imposed a 10 per cent ‘entry tax’ on the iron and steel products from other states. "We will be compelled to reintroduce octroi if this kind of unfortunate rivalry continues," he cautioned.