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Indian Villages

Gilbert Etienne

Part III – The All India Rural Picture and the Future

Chapter 11 – Towards the Next Steps

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1India has reached a stage where a number of issues in agriculture and in the rural economy are – or should be – clear, while others remain hazier. How far should one either attack poverty in a direct way through special schemes targeted for the poor, or through an indirect attack implying more investments in the whole economy?

Some Basic Changes in the Rural World

2Quantitative and qualitative changes are occurring in villages. While the total population has more than trebled between the census of 1951 and 2011, the output of food grains has been multiplied by more than five (for data see appendix). There has been considerable progress in cash crops, cotton, sugarcane, and oil seeds. Changes in the distribution of total value of agriculture are even more striking:

Table 7: Agricultural Distribution from 1982–2006 (in percentages)



Fruit and vegetables


Other crops











Source: A. Gulati and K. Ganguli, Beyond Grain Security 2007.

3It seems likely that the share of other crops (food grains, sugarcane, cotton, oil seeds) has been reduced further by 2012. We must bear in mind that livestock, fruit and vegetables give a much higher return than the main crops, which is why such trends are important, particularly with shrinking agricultural holdings, two-thirds of them now being below 1 ha (appendix). One must add that, in spite of substantial growth, the demand for vegetables and fruit remains higher than the supply, which has led to sharp increases in prices.

4As we have seen, in advanced districts the share of non-agricultural jobs keeps on increasing with the beginning of the society of consumption. On the other hand, several areas are still progressing much too slowly. There has been “a deceleration of agricultural growth” since the 1990s (Ahluwalia 2011). One observes that the massive increase in subsidies and anti-poverty projects (see below) have been accompanied by a fall in public investments devoted to agriculture and rural economy from the centre and the states. Such a trend contributes to the deceleration of agricultural growth (A. Babani in Business India, 8-7-2012). The share of agricultural investments as a percentage of the GDP has declined from 5% in 1980/1981 to 3.7% in 2006/2007 (11th Five Year Plan 2007-2012, vol. III, 8). There has been some improvement during the 11th Plan, when agricultural growth rose from 2% to 3.3% per year. However, this achievement remains below the Plan target of 4% per year.

  • 8 Data from the Central Statistical Organisation, 2009/2010.

5The average growth rate hides differences between states: UP, Bihar, Karnataka, Tamil Nadu, Kerala, and Jharkhand are below 2%. Maharashtra is doing better with 4% and Madhya Pradesh with 6.5%. Gujrat is the supreme star with a GDP growth rate of 10.5% per year from 2002/2003 and 2009/2010 and an agricultural growth rate of 9.6 % thanks to the progress of irrigation, roads, electricity, Bt cotton, agricultural research and extension services.8 However, social achievements are not so spectacular vis-a-vis the Public Distribution System, water, sanitation, and health (The Hindu, 27-9-2012).

6The Planning Commission emphasizes the need to reach 4% or more per year during the next Plan 2012/17. The preliminary report, An Approach to the 12th Plan (2011), makes a comprehensive survey of the tasks ahead, which I refer to below. The growing diversification of agriculture is clear: +2% per year for food grains and +5–6% for livestock, horticulture, dairy, and poultry. Such targets can be achieved but political will and a strict order of priorities will be the decisive factors.

The Direct Attack on Poverty

7It is quite clear that the concern for poverty alleviation is a combination of genuine pro-poor attitudes and political goals. The trends initiated in the 1970s-80s in favour of special agencies, including the creation of more job opportunities, have culminated in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) dated 2005. It began to be implemented in February 2006 and became a nation-wide measure in 2008. The basic idea is to guarantee a hundred days per year of unskilled manual work to people. Payments must be made on a weekly basis. The planning of works is decided in open assemblies of the village and ratified by the panchayat. The basic activities are water security, soil conservation, drought proofing and flood control, land productivity, and road works. Dalits and Adivasis are favoured by the programme. The Central Government bears 100% of the wage costs of manual labour and 75% of the material cost, which includes wages of skilled workers. Social audits should scrutinize all the work records.

Table 8: Total costs of MGNREGA 2006/2007 to 2011/2012

Budget outlay

Rs. 172,500 crores

$38 billion


Rs. 166,516 crores

$37 billion

Person days

1,280 crores

28% Dalits, 23% Adivasis

Source: MGNREGA Sameeksha, Ministry of Rural Development 2012.

8There are many articles on this enormous project – some of which are highly critical while others are more positive. The MGNREGA Sameeksha has been issued by Jairam Ramesh, Minister of Rural Development. This report mentions a number of positive results as well as weaknesses: low quality of certain works, corruption and leakage, delays in payments of wages, limited capacities of many panchayats to prepare sound projects, and substantial differences in implementation between the states.

9We have seen positive results in some of our villages, such as in Mayurbhanj and Kila Ulur, while such projects have had limited success in Bihar. The big and embarrassing question concerns the huge amount of expenditure. Is it commensurate with the achievements? Would it not be preferable to invest more in tasks referred to below which have a lasting impact on the poor? For political reasons, the present Congress coalition government could not give up such a colossal project, but would it be possible to reduce it?

10There are at least eight other central projects for rural areas which target employment, sanitation, and drinking water; seven projects are devoted to education and the mid day meals, covering 104 million children in primary schools, for which reports are on the whole positive (Ministry of Finance 2011, 312–320). In a number of villages, subsidized houses for the poor are successful in spite of baksheesh. One comes across small rents paid to old people.

11One may wonder whether it would not be preferable to have fewer, but better coordinated, projects when taking into account projects that are dependent only on the states. Already in 1979, a senior IAS officer was telling me: “What we need are some simple ideas upon which to build rural development.”

12In the end I would like to quote a comprehensive study by the International Labour Organization (ILO) covering many countries in Latin America, Africa and Asia, which shows the prime importance of widening job opportunities in the non-formal sector. “Developing countries have often attempted to reduce poverty by implementing special work programs or employment guarantee schemes. In principle, these programs can constitute investments for the non-formal segment. In practice, they often function as mechanisms for transferring payments for the poor. Such payments should complement and not substitute for investments in the non formal sector.” (Emphasis added, Ghose et al, 2008, 144–145).

13In all of these debates one should listen more to the voices of the poor. We have seen in Mayurbhanj how the inhabitants of a village would have preferred to have low-lift pumps for irrigation instead of the employment scheme to pave their streets. In 1997, at a seminar about poverty alleviation at the Rajiv Gandhi Institute, Abid Hussain, former IAS officer and ex-member of the Planning Commission, said: “We have had enough of all these anti-poverty schemes. What we need are electricity and roads”. The next day in Khandoi I met my old friend Dalchand, a Bhangi. I asked him what he thought of all these issues. He answered: “Arre Sahab, nam, nam hein, hamko bijli aur sarak chahiye.” (These are just words, what we need are electricity and roads). Apparently, Dalchand does not need electricity because he has neither a TW nor land and he does not need a road since he has nothing to transport. Nevertheless this small man has better understood the significance of such developments for the poor than so many advocates of direct anti-poverty projects.

14As a final point, it is not certain that this approach will always bring so many political dividends in terms of votes. When talking to people who have benefitted from employment schemes, some of them give the impression that the bakshish paid overshadowed the advantages obtained.

15Subsidies, part of them for the poor, have considerably increased in the past thirty years. The major ones, which are dependent on the centre amount to 2% of GDP, i.e. Rs 144,000 crores, or $ 28.6 billion. These are devoted to food, fertilizers and petroleum products. One should add that states’ subsidies involve “very large losses in the power sector due to under-pricing electricity to the farmers with free or very cheap power supply” (Ahluwalia 2011).

16Subsidies are of three types: ones for fertilizers, constituting nearly 1/3rd of the total; cheap rate of electricity for farmers’ TWs, originally designed to boost production; and the setting cheap prices of petroleum for all consumers, with the third one having more social value. Food subsidies, which are supposed to help poor people, play a major role through the Public Distribution System. They involve considerable waste, leakage and corruption, along with transport losses in the case of food grains. According to the Planning Commission, 54% of the food grains under the Public Distribution System disappear before reaching the poor (The Hindu, 19-11-11; Economic and Political Weekly, 18-2-12). Another estimate mentions losses of $ 5.7 billion due to corruption (Business India, 5-2-12). There are complaints from a number of people who are unable to receive a ration card. The Food Corporation of India (FCI) has a coverage capacity of 30 million t, while the central pool had around 60 million t of wheat and rice in June 2012, collected through the Minimum Support Price (Ministry of Finance 2011, 197). 6 million tons of wheat lay under open skies due to lack of jute bags. Losses can reach 20% of the stocks (The Hindu, 22-6-12). The number of fake ration cards has been estimated at 500,000 in Maharashtra (Outlook, 12-4-10).

17The National Food Security Bill envisages distribution of 35 kg of grain per household per month for the so-called general category of people. In addition, there is maternal and child support for the destitute. 90% of rural households and 5% of urban ones will be entitled to subsidized food.

  • 9 The major proportion of electricity generation, power houses, transmission & distribution depends o (...)

18With so many tubewells and pump sets, India’s agriculture consumes 20% of its electricity production, which includes a lot of waste, corruption and theft of current. Power is cheap or free but very often missing. Does it make sense to pay a small amount or nothing, but without receiving a desirable supply of electricity? The answer is further complicated by the states’ politics and vote catching as the State Electricity Boards supply the largest proportion of electricity.9

19When looking at all these anti-poverty projects and subsidies, one cannot escape a feeling of uneasiness. How is it possible that, in spite of all these costly schemes, India’s human development record remains low: infantile mortality is at 62% in rural areas and 41% in cities; 43% of children below 5 years of age are underweight; half of all adult women anaemic; and half of all adults underweight (World Bank 2011, 156–165, 176). The availability of large stocks of grain with, at the same time, a substantial number of people – irrespective of the figure – being undernourished is quite puzzling. The World Bank adds that India’s expenditures on programmes for the poor are higher than in most other developing countries. In Sub-Saharan Africa, which suffers from low development, only 16% of women and 30% of children are underweight.

20To add to our embarrassment, according to Arvind Panagariya, professor of economics at Columbia University, all these data are very doubtful (Tehelka, 25-11-12). However, these have been reinforced recently by the 2012 Global Index. Through sound arguments, the author shows that most of these figures are highly exaggerated. It is also quite doubtful to claim that 240 million Indians are suffering from chronic hunger. I am inclined to believe Arvind Panagariya’s criticism in view of my reservations on the measurement of poverty (see previous chapter).

21Undoubtedly, there has been social progress in the last three decades. The average life expectancy has increased from 62 years in the 2001 census to 70 in 2011. The literacy rate has grown from 64.8% in 2001 to 74.0% in 2011 (census). Poverty has decreased substantially in many villages. There is also progress in cities with rising middle classes. To sum up, beyond these controversies on data, there is no doubt that a substantial amount of acute poverty remains in a country which has enjoyed considerable development over more than sixty years, with the involvement of elites of a high standard coming from all walks of life.

22Towards the end of 2012, the government took a drastic turn with regard to subsidies. According to the change, all subsidies will be abolished and replaced by a cash allowance of Rs 40,000 per year ($ 730) granted to 720 million Indians, i.e. more than half of the country’s population. Such an allowance has been practiced successfully in Brazil. It should remove many opportunities for corruption and/or waste, but let us see how it will be implemented. The Delhi Government has decided, under The Food Security Scheme (allotted 150 crores in the Budget), to replace 400,000 ration cards granted to 400,000 families below the poverty line with Rs 660 per month cash allowance granted to 660,000 households’ bank accounts.

The Global Process of Rural Development

23Let us summarize our field studies, which show the impact of growth, along with diversification of the local economy, on poverty.

Table 9: Daily agricultural wages for men (in kind or in current rupees)






1 or 5–7 kg/grain at harvest

10–12, or 10 kg

60, or 10 kg


1 or 2–3 kg/paddy

10 or 4–8 kg



1–1.50 plus some rotis (1967)

5–6 or 3–6 kg paddy


Kila Ulur

1–2 or 4–8 kg/paddy

7–10 or 10 kg


Orissa, Puri



3–4 (1967)








8–10 or 4 kg paddy


24Some latest data for 2011/12 (wages/Rs): Rainfed areas of Mayurbhanj, Rs 60 to 70 (Rs 20 in 2002); villages in Madhubani district, Bihar, Rs 80; in Khandoi, Rs 150–160 and during harvest time 25 kg of grain per day.

25The table is confirmed by the FAO Report quoted in the previous chapter. The breakthrough of the main crops has accompanied the diversification of agriculture and of the local economy along with an increase in non-agricultural jobs. Migrations to cities and/or other states act as another safety valve, particularly in Bihar. In Jodhpur, the severe constraint of the climate limiting agriculture is compensated, to a large extent, by small industries, trade, and handicrafts. In spite of serious weaknesses, progress of transport and power has been reported. On the other hand, poverty remains severe in slow moving regions, whether they are isolated or not.

26A recent World Bank Report, Perspectives on Poverty in India (2011), made for the Government of India fully confirms our conclusions in terms of achievements and alarm bells: slowdown of agriculture, growth of non-farm jobs, which contribute towards 50% of rural household income in dynamic areas, displaying a clear acceleration since the 1990s, along with fast growth of industries and services. While these findings are encouraging, the authors of the report insist on the need for faster agricultural growth, in food grains as well as for other crops like oilseeds, vegetables, and fruit.

27I have given clear evidence of substantial poverty alleviation in a number of villages, but what about income disparities? These have increased in the last decades and the Gini Coefficient for India had reached 36.8% in 2004/2005, versus China, which has the maximum in Asia with 46.9%. For Japan the coefficient is 21.9%, and for South Korea 31.6% (UNDP 2008). I am unable to assess income disparities in the villages surveyed because such a measurement is beyond the capacity of a sole researcher. This can only be done by a team. Moreover, I am inclined to think that, at this stage of development, the decisive aim is to reduce poverty.

28The global process of rural development described in this book is by no means confined to India. I observed it in countries as different as China, Pakistan, Bangladesh, and, before it became engulfed in wars, Afghanistan (Etienne 1985 and 2010). Looking at this global process of rural development in different places evokes a feeling of déjà vu. This process of growth – agricultural diversification, technological innovations, industrial progress, increased trade, closer links between villages and cities owing to the expansion of roads and/or waterways – was very clear in Western Europe in the 12th and 13th centuries. It was rather similar in China during the same time period (Elwin 1973). Similarly, it seems to have occurred in Bengal, particularly under the Mughals, as described by Bernier, the famous French traveller: “In Bengal, everything is in abundance.” (Bernier 1981, 325). The French historian, E. Leroy Ladurie, writes about Catalonia (Spain) in the eighteenth century: “An astute irrigation policy boosting crop yields, vineyards and orchards, fodder for the numerous cattle, iron ploughs replacing wooden ploughs, new industries… Everything moved together: standards of living, wages…” (Le Roy 1969). This description could also be applied to the Green Revolution areas, but with two differences. First, in the past, population growth hardly reached 1% per year unlike the situation today. Second, technological innovations have become much more advanced and far-reaching than the innovations in earlier centuries, such as improved ploughs or the replacement of the mot system by the Persian wheel.

Warnings and Alarm Bells

29It is odd to see that whatever we are writing below on defects of agricultural policies has been raised, in the past twenty to thirty years, in countless official reports, in books of scholars, in the media, by Indians and by some foreigners. The Economic & Political Weekly is replete with such articles. C. H. Hanumanta Rao already issued warnings in his book dated 1975. B. D. Dhawan deplores the defects of canal irrigation in 1988. A number of other scholars like Y. K. Alagh, G. S. Bhalla, A. Gulati and Rakesh Sharma are no less critical of the falling investments and recurrent expenditures in agriculture. Similar complaints come from Research Institutes as I have recorded on several occasions. In 1989, the Planning Commission, under the auspices of Y. K. Alagh, issued a report on Agro Climates Planning. Complaints are issued repeatedly by the Ministry of Agriculture, such as the excellent report on The Agricultural Policy, in 2000. It refers to poor irrigation, lack of electricity for TWs, improper use of chemical fertilizers, the need for massive irrigation and drainage in the eastern plains (already recommended by S. R. Sen in his report to the Reserve Bank in 1984), emphasis on watershed development, and greater help to isolated Adivasis. In 2005, the World Bank had tread along similar lines in India Re-Emerging: the Agricultural Sector. Following the 2007/2008 budget, M. S. Swaminathan, Y. K. Alagh, and A. Gulati asked, once again, for additional efforts in agriculture and irrigation. P. Chidambaran, then Finance Minister, acknowledged the need for “greater attention to agriculture” (Business India, 25-3-2007).

30Although there have been some increases in budget allocations and growth rate in recent years, these remain far below the requirements.

Research and extension services

31At a time when agriculture is becoming more sophisticated and complex, research and extension services suffer from a shortage of funds and personnel. R&D (Research & Development) accounts for 0.33% of the agricultural product in India compared to 0.49 % in China and 2.4% in the West (S. Pal, Economic and Political Weekly, 26-6-2012). The shortfall of staff is estimated in 2001 at 1,960 technical and administrative people. Private research is gaining ground, but the public sector retains an important role to play, in particular for plants, which are not attracting the private sector. As for the extension services “the system has more or less collapsed” wrote Montek Ahluwalia, Deputy Chairman of the Planning Commission (Economic and Political Weekly, 21-5-2012).

32Deep improvements are needed in both fields for two reasons: a) to correct a number of damaging practices leading to a slowdown in agriculture and the wastage of inputs, as observed in our villages and b) to introduce new and better techniques and new varieties of crops.

33The use of chemical fertilizers and pesticides requires considerable improvements. There is no correlation between the sharp rise in consumption from an average of 17 million t of nutrients per year from 2000/2001 to 2004/2005 to 27 million t for 2009/2010 and 2010/11 (for nutrients see appendix). 70% of the fertilizers are devoted to food grains. Data on pesticides are lacking but one suspects that there is the same discrepancy, like, for instance, excess use for cotton. Fertilizers’ use is biased in favour of nitrogen, leading to chemical imbalance with phosphate and potash, which in the long run damages the soils. Such a defect appeared with the Green Revolution but has not been corrected even after more than forty years. One may add that the picture is similar in most Asian countries, including China.

34Then there is the issue of soil deterioration. There is a growing awareness among cultivators and agricultural officers of the effects of substantially increasing the use of organic fertilizers combined with chemical ones in irrigated areas. As for rainfed peninsular India, much more organic manure is needed to curb soil degradation. Greater and better supply of farm manure, compost, crop residues, and possibly vermicompost, are hindered by the poor traditions of Indian farmers in these matters, as seen in the villages. The Chinese, have been world champions of organic manure, farm manure, possibly silt from rivers and grass and including, since ages, the use of compost, a Chinese invention, and the use of the content of latrines attached to every farm house. Using these, the Chinese have been collecting 10 t/ha or more since ages. In Mao Zedong’s days, one could come across up to 50 t/ha. Farmers were devoting 1/3rd of their time to the collection, treatment and use of manure (Huaiyin Li 2009). In India, small landowners may not have enough farm manure because cow dung is used as fuel or because of the lack of cattle. Young farmers already desiring to leave agriculture may be reluctant to perform additional work in order to apply 10 t/ha or more of organic manure.

  • 10 For all these data see State of Indian Agriculture, 2009, 118-123.

35Micro-nutrients such as sulphur and zinc are needed in many areas which also require much more soil testing than is being done at present. The potential for organic manure is around 13 million t in terms of nutrients (9 million net). The actual use is considerably less, at around 1/3rd for crop residues and animal dung. By 2015, food grain consumption of 300 million t may require 35 million t of chemical fertilizers (for nutrients, see appendix) and 10 million t of organic manure.10 Last but not least, how far can one reduce fake fertilizers, pesticides and seeds?

36Plenty of new tasks are growing for research and extension services: hybrid rice producing 8,000 kg/ha of paddy in stations; new paddy cultivation techniques, as practiced in Tamil Nadu; better drought resistance for coarse grains; improved varieties of pulses, oilseeds, vegetables, fruit; further progress in livestock and milk; and in techniques like zero tilling, i.e. sowing without previous ploughing.

37Greater progress can be achieved, but one constraint, though possibly reducible, will remain: how to reach millions of farmers in 640,000 villages? Small projects of NGOs, as seen in Mayurbhanj, can provide the necessary human and material resources (a staff of 62 persons, and $ 600,000 of expenditure per year for 20,500 people). But such a model cannot be replicated all over the country. The success of extension services in USA and Europe was much easier than in India because of the comparatively small number of farmers. Today, as an example, I know a former rural village in Switzerland, which, out of 5000 inhabitants, has only 6 agricultural households and 5 vineyards now. The agricultural services of the canton reach every cultivator for technical assistance against payment. They can even hold the accounts of the farmers.

Water Management

38Water remains the key issue in agriculture, especially when bearing in mind that most rains occur during the monsoon between June-July and October, with 50% of the precipitation occurring within 15 days. Over 90% of rivers’ flows last just four months. Northern India benefits from small winter rains but these are not always reliable. As we have seen, there are wide differences in rainfall and the lesser the rains in a particular region the more erratic they can be. About one-third of India can be exposed to drought and on the other hand, 40 million ha are flood prone.

39Out of 140 ha that are cultivated, 63 to 65 million ha are irrigated in 2010. Both data refer to the net or topographic surface. Gross irrigation, i.e. including multi-cropping, amounts to 88–90 million ha out of a gross cropped area of 185–190 million ha. The data do not take into account the efficiency of irrigation referred to below. Good monsoons compensate for weak irrigation, while drought affects crops under defective irrigation. A major shift in irrigation occurred mostly after independence. Canal irrigation has been overtaken by about 26 to 30 million TWs, pumps on open wells, and, in some areas, low-lift pumps taking water from rivers. These cover 70% of the irrigated land. The complaints about the lack of electricity or its lack of reliability are universal in all sectors of the economy and among private people. Between 1992 and 2007, only half of the targets of additional power were reached. The original target of the 12th Five Year Plan (FYP 2007–2012) was reduced from 78,700 MW to 61,374 MW, and only 50,000 MW will be reached (Ministry of Finance 2011, 253). Agriculture is severely hit since it consumes 20% of total electricity.

40Another worry concerns excess pumping in several states, particularly Punjab and Haryana which have the highest rate of irrigation by TWs. Many farmers have to deepen the boring of their TWs, which requires more powerful engines, and, hence additional expenditures. But even when doing so, the recharge of groundwater is not always assured. The falling groundwater level is also affecting parts of the peninsula. Since years there have been talks of passing a law to limit the number of wells, thus dealing with the ownership of the underground, which, so far belongs to the owner of the land.

41While many parts of India are reaching the limits of their irrigation potential, the latter remains considerable in the eastern plains, which enjoy high rainfall, plenty of rivers and groundwater, which has not been tapped much so far. They could be irrigated from 80 up to nearly 100% like Punjab and Haryana, while the rate is around 30-50% or even much less in Assam (5%).

42Canal irrigation is also far from satisfactory due to poor maintenance, due to which only 1/3rd of the water entering the main canals reaches the plants, while the normal rate should be double. The price asked from farmers covers “only about 15% of the O&M costs” (Ahluwalia 2011). To make things worse, a large amount of money is absorbed by the staff of the Irrigation Department (110,000 officials in UP). In Haryana, 83% of the funds allotted to canal maintenance are devoted to employees’ salaries (Briscoe & Malik 2006, 27). Another weakness concerns the trend of head-reach farmers taking too much water at the cost of tail-enders.

43Conflicts between states over sharing water add to the difficulties, as seen in Thanjavur. The idea to integrate rivers basins has been under discussion for a long time, as for instance shifting of excess water from the Ganges and Brahmaputra to the South, but the costs appear too high and one could expect inter-states rivalries. When considering the limitations of groundwater, surface water remains essential and requires more major works, but delays, lack of money and neglect hinder progress.

44Rajiv Gandhi had announced on October 29, 1989 a target of an additional 10 million ha within the next five years. Only 7 million were covered over time. An Accelerated Irrigation Benefit Program was started in 1996. In March 2011, out of 290 projects, only 139 were completed. The gap between the new irrigation potential created and the actual irrigation amounted to 7 million ha in 1984/1985 and to 14 million ha in 2008/2009, due to delays in completing the construction of canals and watercourses.

45Larger amounts of funds should be devoted to operations and maintenance (O&M) of canals and for the acceleration of new investments. The overhauling of State Irrigation Departments is equally urgent when considering the loss of efficiency of these departments in many states. We have seen considerable delays in major irrigation projects in Mayurbhanj. A recent White Paper on Irrigation published by the Government of Maharashtra, points out considerable cost increases due to very long delays, corruption and other defects. One major work has been delayed by 28 years (The Hindu, 2-12-12).

46In the past, collective tanks have been an important source of irrigation in South India and in some central parts. Most of them are now in a state of decay, with the smaller ones depending on the village panchayat, and the larger ones on the Public Works Department. Both kinds are poorly maintained and farmers tend to prefer to bore open wells with a pump set or TWs, meaning that a number of tanks are now defunct. Even if one could restore them, one must bear in mind that the tanks used to get “adequate water supply in three out of ten years” which also shows the limits of schemes for harvesting water (Polanisami in Prasad (ed.) 2003, 171).

47Water saving techniques like drip system or sprinklers have been propagated for more than 20 years, but the pace of progress could be faster. In 2008, only 500,000 ha were covered. Farmers may benefit from a subsidised loan but the costs of equipment need to come down through improved technology. Drip systems can save 50% of the water, sprinklers around 15%, but during hot months the evaporation can be high. Drips are particularly welcome in horticulture, in sugarcane and cotton. Sprinklers, as in Europe, can irrigate cereals. A reorientation of crops could be promising: Punjab and Haryana reducing rice and wheat crops, which require too much water, in favour of fruit and vegetables requiring drip irrigation, while progress of irrigation in the eastern Plains would boost food grains output.

48Rainfed areas cover 56% of the total cropped area. 84% of pulses, 73% of oilseeds and 45% of cereals are grown under such conditions. So far, watershed management has met “with limited success” (Planning Commission 2012, 73) although it has been encouraged for at least the past twenty years.

49Such projects are needed in peninsular India. The idea is to fight soil erosion and prevent the run-off of water in order to enrich groundwater, which can support open wells-cum-pump sets. Such projects are complex and may be costly. They require a careful survey of the area. Then it is not always easy to reach an agreement with and ensure the participation of all the farmers involved. In many instances, the village panchayat does not possess the technical know-how to promote such projects, which give better results when supported by an NGO, as seen in Mayurbhanj. They are vulnerable to drought years, especially if they are consecutive.

50There are controversies. In water scarce regions “run-off of water harvesting does not offer any potential for groundwater recharge or improving water supply at the basin scale” write M. Dinesh Kumar et al. in a very critical article in Economic and Political Weekly (Dinesh Kumar et al.). They also underscore that the run-off available from rainfall and groundwater recharge in such regions is low. It is accompanied by “the poor storage capacity of hard rock aquifers in most water scarce regions”. They correctly insist on more scientific research on a proper, balanced development of surface and groundwater. The Central Groundwater Board, dependent on the Ministry of water Resources, takes an opposite view in their recommendations in a report titled Water Harvesting Techniques to Augment Groundwater (undated, but rather recent).

51From these conflicting views one thing becomes clear: greater efforts are needed in research and implementation of projects. NGOs cannot be everywhere, that is why extension services and the agricultural district administration must be much more active.

52Lack of water can be a calamity, yet excess water is also damaging. Flood prone areas account for 40 million ha, about 25% of the cultivable land, mostly located in the eastern plains: 55% of the total area in Bihar, 37% in West Bengal, 32% in UP, 10% in Orissa, and 50% in Assam (Report of the National Commission on Flood 1980 and Census of India 2001). There are enormous needs for embankments and drainage canals, which are still not covered or are not adequately maintained.

53As we have seen, there are, in addition, low lands, which even under a normal monsoon suffer from excess water, which either prevents any paddy cultivation or can tolerate a very low yield floating paddy. Drainage measures are, all too often, lacking.

54Finally, more drainage is needed in canal-irrigated areas suffering from water logging and/or salinity.

Markets and Contract Farming

55The marketing of agriculture has been criticized for many years for weak supply chains and too many intermediaries. Farmers often receive only 12-15% of the price at which horticulture products are sold in the bazaar. Recently, angry Punjabi farmers threw their bags of potatoes on the road. They hardly receive Re 1 per kg, while potatoes are sold at Rs 15 per kg in Delhi markets (The Hindu, 16-11-12). In addition, there are post harvest losses: about 30% of vegetables and fruit output and around 10% for cereals. Marketing suffers from numerous intermediaries, slow transport, poor packing, lack of cold storage, which is so often needed for fruit and vegetables, poor marketing places and cumbersome regulations such as the APMC Acts (Agricultural Produce Marketing Committee) and other acts. For instance, today, apples coming from Himachal Pradesh to Bombay are more costly than apples imported from New Zealand.

56Only around 5% to 7% of total retail trade is in the organized sector, much less than in countries like China or Brazil. “Food and grocery form 62% of the total retail pie and 10.5% of the organized retail pie” (Gulati 2007). Processing of fruit and vegetables is also very limited.

57As we have seen, a major change has been occurring within the agricultural sector over the past thirty years. The share of the main crops is falling in favour of fruit, vegetables, poultry, fish, and milk. Since ages, all of these, except milk, have been marketed much more than food grains. Today, market channels, already inadequate in the past, cannot meet with the increasing supplies of such commodities. See the number of cold storage houses needed today compared to the needs for the same in the 1960’s. Market rules also need changes. Contract farming has started to change the picture with a number of large Indian companies stepping in: Tata, Godrej, Reliance, Mahindra and others including foreign enterprises. Two types of operations are practiced: direct purchase and sale of agricultural commodities or companies purchase and process such commodities. Nestlé, for instance, opened a powder milk factory in Moga (Punjab) in 1961. The milk is collected and processed. In the 1990s, Pepsi Co followed the path: supporting farmers for their growth and processing the supply of tomatoes into tomato juice. In a number of cases, the companies may supply new techniques, seeds and fertilizers, along with easier bank loans. Between 2001 and 2009, potato yields under such contracts have tripled from 16 t/ha to 54 t/ha, the equivalent of Europeans yields. A. Gulati (2007) quotes a study showing that milk contract farmers make double the profit made by non-contract farmers and the profit difference can reach 78% for vegetables.

58There are hurdles in these deals. A. R. Vaugal, one of the architects of Pepsi Co’s contract farming, notes that “the fundamental problem is that farmers do not understand industry” and vice versa (India Today, 12-10-2009). Is this another instance of the gap between urban elites and villagers?

59Furious polemics have started about the possibility of allowing multinational companies like Walmart and Carrefour to open retail shops in India. Bazaris and local politicians are dead against the move. The government has finally decided that states could authorise such activities, provided that the companies concerned respect a number of rules. They are allowed up to 51% foreign equity in a retail company, provided they supply at least $ 100 million. Part of such investments must support the improvement of infrastructure in the retail chain (Sarkar 2013).

60As we see in Europe, contract farming may lead to abuses by the purchaser but, on the whole, provided the interests of the farmers are respected, the system may be more favourable to producers than the old pattern of trade, which can have adverse effects on farmers. Contract farming by Indians or foreigners can boost the output of fruit, vegetables, and eggs, the supply of which remains too low at present, leading to sharp price increases. In other words, contract farming may contribute to changes and improvement in food habits within the society of consumption.

Climate Change

61Towards the end of the century the temperature may have increased between 1.8 to 4 degrees C in India. One could expect heat waves, heavy precipitation and a rise in sea level by 0.20 to 0.60 m. Water supply would be affected by the melting of the glaciers in the Himalayas. Yields of some crops would increase while wheat output would fall. All these factors would result “in greater instability in food production and threaten livelihood security of farmers… We need to urgently take steps to increase adaptive capacity to mitigate climate change impact” by enhancing, in particular, investments in water storage and ensuring more efficient water use with increased appropriate agricultural research. At the same time, it is hoped that international negotiations on these issues will progress faster than they have until now (National Academy of Agricultural Sciences 2009, 87–89). In India, as well as in other countries, the ruling elites avoid taking drastic measures to reduce the dangers, which may severely affect future generations.

Leakage and Administration

62Money is far from being the sole factor of growth. As far as irrigation, roads, cooperative credit, extension services and electricity are concerned, in India, as in other developing countries, one comes across weaknesses: neglect and laxity (laparvahi), lack of administrative control and oversight by senior officers, along with corruption, collusion between politicians and local vested interests, and lack of sanctions. Similar shortcomings are equally common in the areas of education and health, as denounced by Amartya Sen (“India’s Poor need a radical Package”, The Hindu, 9-2-2005). Teacher absenteeism, particularly in villages, is as high as 25%, leading to the wastage of 22.5% of the outlay for education, according to a UNESCO report (C. Chauhan, Hindustan Times, 12-8-2007). When people are asked why they do not complain, they reply, “Koi nahin sunta” (Nobody listens), a comment recorded repeatedly in all my surveys, from the first one to the last. How far could one reduce such weaknesses?

63Since the introduction of Panchayati Raj in 1957, there has, undoubtedly, been some improvement in village panchayats’ commitment and operations. The 73rd Constitutional Amendment of 1992 “enlarges the space for people representation in matters of governance… the Act sought to correct the prolonged marginalisation of the poor” (Alagh, (ed.) 2007, 15). Based on this very comprehensive report on panchayats, it becomes apparent that one remains, twenty years after said amendment, far away from such goals. True, there are cases were Dalits assert themselves in the village panchayats and one comes across women chairpersons. Yet, Y. K. Alagh (2008) and his colleagues mention in their conclusion many shortcomings in irrigation, land development, and the gap between targets and achievements. “As an overall picture, the contemporary picture is far from comforting… a few exceptional States stand out as islands in an otherwise bleak canvas… The quality of activity leaves much to be desired. However, there are shining exceptions.” S. Wiswanathan is also quite critical some years later: “After two decades of the functioning of PR (following the 1992 amendment), many feel that nothing much has come of this exercise.” Then he refers to Dalits who are victimized by upper castes, corruption, and weak panchayats’ chairmen, possibly manipulated by dubious officials (The Hindu, 18-6-2012).

64This kind of obstinacy of relying on village panchayats has been reemphasized, as we have seen in the MGNREGA and later on in 2012 and 2013, advocating more power to the village chairman. Perhaps it is time to remember Dr. Ambedkar, the father of the Constitution (see Chapter 1) and one of the very few educated Dalits, who succeeded in reducing the role of the panchayat in the Constitution against the will of Mahatma Gandhi. He was well aware that the local neta (leader) of the dominant castes would be the main beneficiaries of the system.

65In promoting development from below, bottom up through local authorities, India has been a pioneer in the Third World. Such an approach went through its ups and downs. It lost weight with the advent of the Green Revolution in Asia and its top down approach, which proved successful. However, in the 1980s, the bottom up approach made a big come back in Third World countries and in international assistance.

66This re-emphasis of bottom up has been recently studied under the auspices of the World Bank (Localizing Development, Does Participation Work? (2012)). Ghazala Mansuri and Vijayendra Rao reviewed 400 cases among the World Bank’s projects costing $ 85 billion over the last decade. “The purpose of participatory programs is to enhance the involvement of the poor and the marginalized in community – level – decision making bodies in order” to improve the conditions of the poor. In practice, “the participants in civic activities tend to be wealthier, more educated, of higher social status (by caste and ethnicity) and more politically connected than non-participants.” According to the main findings: “Inequality tends to worsen both efficiency and equity” while investments in infrastructure are often wasted with or without corruption. Such observations coming from Latin America, Africa, and Asia confirm our observations on India.

67Would a stronger district administration not be more helpful to the poor and be more successful in achieving overall growth than all bottom up projects? From a political point of view, one could not give up the whole system but it would help if it was restricted in favour of a stronger district administration. A capable and committed IAS district magistrate, who is directly recruited and not promoted, along with equally competent senior officers looking after agriculture, health, and education, could, as I have observed in a number of cases, make a substantial difference compared to the situation in districts that are “led” in a routine manner. However, to work efficiently, such a system needs political commitment on the part of political leaders at the state level so that officers are not transferred frequently following pressure from dubious politicians. In UP, most senior IAS officers are transferred within less than a year, and this is not an isolated case.

68Nearly sixty years ago, in a broadcast to the nation, Lal Bahadur Shastri declared: “The district officer should delegate all his routine work to some other officer, reserving his own attention and energies almost exclusively for work connected with agricultural production” (The Hindustan Times, 11-1-1965). Similar pleas are repeated in the 1980s and later. One may add the complaints about transfers among the main issues.

69Finally, there is a very practical point. Huge districts of 8,000–10,000 sq km in states such as Orissa should be bifurcated so that they become more manageable like the Punjab districts that are 2,000–3,000 sq km in size, a plea found in countless reports.


8 Data from the Central Statistical Organisation, 2009/2010.

9 The major proportion of electricity generation, power houses, transmission & distribution depends on the states. There are also central power houses, and private ones.

10 For all these data see State of Indian Agriculture, 2009, 118-123.


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