Onion prices: It's a homemade, artificial crisis

With the assembly elections nearing, the Centre has finally got cracking. It has directed the states to come down on hoarding that is driving up onion prices. This is perhaps the longest season when onion prices have remained abnormally high — from July to mid-September — and is expected to last until the first week of October.

Knowing that simmering anger among consumers can upset poll calculations, the ministry of consumer affairs, food and public distribution has been forced to act. More so, considering the spike in onion prices has spread to all other vegetables, except the potato. While onion prices have hit Rs. 80/kg, no other vegetable is available at less tha Rs. 40/kg even though we had a more-than-bountiful monsoon.

There is more to onion prices than what meets the eye. First of all, let’s be clear that raging food inflation is a reflection of the market economy: prices of all commodities, across sectors, have been steadily rising. Take the case of housing and real estate. The unprecedented rise in land prices and the phenomenal jump in prices of built residential houses/flats too defy any economic rationale. The cartels operate everywhere. Try making an online purchase of an airline ticket. If you click on a particular route more than three times, the ticket price goes up. But we never complain. We have accepted the hikes, and absorbed them. We only scream when food prices go up.

Here is how the government manipulates inflation data. Knowing that it is invariably food prices that pinch the average consumer, the government had, some years back, quietly modified in its calculations the system of according weights to different products. It reduced the weights for food items, and added more weights for consumer products like refrigerators, air-conditioners etc. Even with these highly distorted parameters, food prices in the wholesale price index for August showed an increase. Interestingly, food inflation as measured by the consumer price index showed a decline in the same period.

Now let us look at the trade. Unlike other vegetables, onions have a longer shelf-life. So the trader knows it pays to manipulate the prices. Reports point to how the wholesale traders have bought onion from growers at approximately Rs. 8/kg in April-May and stacked them at numerous places around the Nasik region, the epicentre of onion production in India. A handful of big wholesale traders, who control the supply side, manage to create an artificial shortage. This is exactly what was done in 2010 when prices had shot up unexpectedly. Production exceeded the demand by about 20% , and yet the onion prices had shot through the roof.

This year too, there is no significant shortfall in production. With production falling by a mere 4% there is no justification for retail prices to go up by upward of 400%. An investigation by a newspaper showed how the traders made a neat Rs. 150-crore in just four days when prices peaked at Rs. 4,500/quintal on August 13.  Even the Agriculture Produce Marketing Committee in Nasik has acknowledged that more than 2.5 lakh tonnes of onion were available with farmers in 66 villages of Lasalgaon.

Onion prices have also remained high in the organised retail chains. These chains were supposed to buy directly from farmers, and so the prices should have been lower. Replacing one set of middlemen with a more sophisticated one is not the solution. Both exploit gullible consumers as well as farmers. What the trade needs is a stern deterrent action. But unfortunately, onion is not among the products which come under the Essential Commodity Act. This allows the trade to go for a killing. Moreover, in a market-based economy, markets are supposed to make a correction. This is a wrong assumption. Markets are not like seasons, these are willfully manipulated.

Source: This is a homemade, artificial crisis. Hindustan Times, New Delhi. Sept 20, 2013.

http://www.hindustantimes.com/editorial-views-on/ColumnsOthers/This-is-a-homemade-artificial-crisis/Article1-1124517.aspx

Pushing farmers out of agriculture is not economic growth.

A few days after the release of the latest census data I happened to be participating in a TV discussion on the continuing distress in agriculture. After all, with nearly 2,500 farmers quitting agriculture every day, and with the number of cultivators owning land declining to less than the number of landless farm labourers for the first time, the question that was asked to me was whether this was good news or bad.

“It certainly is bad news for the country,” I replied, adding: “But it must have come as a great disappointment to India’s planners and policy makers. They were anticipating a bigger shift in population from the rural to urban areas, and it shows that all their efforts to force the farmers to abandon agriculture have not worked so well. They have not been able to meet the economic prescription that the World Bank had prescribed.” Needless to say, the economist on the panel wouldn’t agree.

At a conference organised by M S Swaminathan Research Foundation, in Chennai, way back in 1996, I vividly recall a presentation made by the then Chairman of the Consultative Group on International Agricultural Research (CGIAR) and also a vice chairman of the World Bank, Dr Ismail Serageldin. He said as per World Bank’s estimates the number of people migrating from the rural to urban areas in India in another 20 years – by 2015 – would be equal to twice the combined population of UK, France and Germany. The combined population of these three European countries is around 200 million. So the World Bank had anticipated 400 million people, more than the population of United States, moving out of rural areas in India in the next 20 years.

I thought this was a warning. Perhaps the World Bank was telling us to be doubly careful and initiate appropriate policy approaches to restrict the population shift, which is laced with disastrous socio-economic as well as political ramifications.  No, I wasn’t correct. The World Bank was actually spelling out an economic prescription. This becomes apparent when you read the subsequent World Development Reports, annual publications of the World Bank. Reading the 2008 World Development Report, I was shocked to find the bank actually asking India to speed up the population transfer by encouraging land rental markets. 

At the same time, the bank made it abundantly clear that the younger people in rural areas do not know anything but farming. Displacing them from agriculture without teaching them the skills to become industrial workers will only add to the rural workforce. It therefore suggested setting up a network of training centres where these youngsters could be trained to become industrial workers. And no wonder, in the 2009 Budget speech, just before the elections, the then Finance Minister made a budgetary provision for setting up 1,000 industrial training institutes.

I wasn’t therefore surprised when Dr Raghuram Rajan, the new governor of the Reserve Bank of India (RBI), parroted the same economic prescription. In an interview with the New York Times, this is what Rajan had to say:  “In terms of where will growth come from, it doesn’t need to come from fancy stuff like extraordinary innovation of one kind or another. Just getting people from agriculture into services and industry itself is growth.” He has repeated the same solution to the economic woes in a Walk the Talk he had with Shekhar Gupta sometimes ago. And as I said earlier, Rajan too is disappointed. In another interview, he admitted that the exit of people from agriculture has not kept pace with economic growth.

Soon after assuming office, when Rajan said he is not looking for the number of ‘likes’ on the facebook but is contemplating some tough decisions, my impression was actually he wanted to convey was that he will opt for ‘tough love’ – tough for the aam aadmi, and love for the rich -- because this is exactly what the market economy textbooks prescribe. Allow for unbridled privatisation of profits, and when the bubble bursts socialise the costs. It’s the poor who must make sacrifices to keep the wheels of economy churning. This is exactly what happened at the time of the 2008-09 economic melt-down. This is what subsequently led to the Eurozone crisis, and this is what has been at the back of India’s economic downturn.  

Moving people out of agriculture may be the ultimate goal, but there are some ways to prop up the economy in a short-term. Sometimes back, senior journalist and author M J Akbar had in one of his columns given us an excellent idea. He quoted a Russian Finance Minister, who in wake of declining GDP in Russia, actually asked fellow Russians that the least they can do to help the economy grow is to start drinking more vodka. The Economist too has among other things suggested opening up of casinos to ensure that people with surplus money do not flock to Sri Lanka on weekends. As if this is not enough, the Thai have proposed setting up of massage parlours under the Indo-Thai free trade agreement that is being renegotiated. Massage parlours are of course a service industry.

If these are the options available to raise the sagging economy, there is something terribly wrong with the way we perceive economic growth.  But let us first look at the flawed thinking that is aimed at destroying domestic agriculture. The neglect of agriculture is deliberate and part of a bigger design. In a country where roughly 70 per cent of the population lives in the countryside, there can be nothing more disastrous than to plan for a massive population shift in the coming decades. Just because the World Bank/IMF and the American universities have been flouting the crazy hypothesis, does not mean that we should follow it blindly. What India needs therefore are leaders with vision and wisdom and not ideological free market brats who cannot see beyond the G-20 mandate. 

Agriculture provides livelihoods for nearly 600 million people. They are certainly underemployed, and undernourished. The challenge therefore is to make them gainfully employed, and not to uproot them and turn them into agricultural refugees. Like the young graduate from a business school, a farmer is also an entrepreneur. He needs improved skills for which he needs training, and also needs a launching pad. Take the case of a poorest of poor women in a village. When she goes out to buy a goat, she needs microfinance. She eventually ends up paying 24 per cent interest to MFIs, which at weekly repayment plan turns to be 38 per cent. With such a predatory interest, she will perpetually remain in the poverty trap.

If steel tycoon Laxmi Mittal can be advanced Rs 1,250-crore at zero interest for investment in Bathinda refinery, or if Ratan Tata can be provided land at a throwaway price and financial credit at 0.5 per cent rate of interest, I wonder why the poor are penalised. Provide the poor women credit at zero percent, and I bet she would be driving a Nano car at the end of the year. Give the farmer a decent monthly assured income, and make appropriate investments in rural infrastructure, and I can tell you he will not only put the country’s economic growth on a much higher pedestal, but ensure that the gains of economic development are distributed widely and equitably.

India therefore provides a unique opportunity for neoliberal breed of economists like Raghuram Rajan to de-learn and un-graduate. As someone said, that’s the only way we will learn to challenge all that we have accepted as time-tested truths. Move away from the growth fetish, remove the IMF/World Bank cap, and start looking afresh at economics as if people mattered. If a non-descript village like Hiware Bazaar in Maharashtra can boast of 60 millionaires, and that too without any forcible land acquisitions under public-private partnership or sucking the state exchequer dry with tax sops and tax holidays, each of the nearly 6.4 lakh villages that dot the country can do the same.

What India needs is a production system by the masses, and not for the masses. That’s what Mahatma Gandhi said. And he wasn’t wrong. #   

Source: Tehelka, Vol 10 Issue 38, Sept 21, 2013.

 http://www.tehelka.com/forsaking-agriculture-is-not-the-right-answer/

What went wrong with Indian economy

Addressing the UN General assembly in Sept 2011, Prime Minister Manmohan Singh had said: “Till a few years ago the world had taken for granted the benefits of globalisation and global interdependence. Today, we are being called upon to cope with the negative dimensions of those very phenomena.”

“The shoots of recovery which were visible after the economic crisis of 2008 have yet to blossom,” he said, adding:” In many respects the crisis has deepened further.” If the Prime Minister knew what was coming, the question that needs to be asked is then why did he allow the Indian economy to take the same route towards self-destruction? The rupee has been on a free fall, the current account deficit – the difference between export and imports – have surged to the pre-1991 levels, and the fiscal deficit shows no visible signs of reduction.

Prime Minister should have known it much better. Even at the peak of the economic growth period, between 2005 and 2009 when economy grew at 8 to 9 per cent, the high economic growth did not result in job creation. According to a Planning Commission study, 14 million people were pushed out of agriculture, and another 5.3 million jobs were lost in the manufacturing sector in the same period. If growth was not translating into additional jobs, and instead was leading to increased joblessness, there was something going wrong.

In the 9 years since Manmohan Singh took over, India has been flooded with cheaper manufactured goods, the imports touching $ 50 billion (Rs 3 lakh crore). Nearly 54 of the imports have come in from China alone. Much of the imports were of consumer goods that could have been easily manufactured within the country. As if this is not enough, India is now having talks with China to sign a free trade agreement. In any case, India has been on a fast-track mode to sign bilateral trade agreements with some 34 countries. The result: imports have far exceeded the exports from India, which means the trade agreements had not benefited the country. 

Prime Minister cannot blame anyone. He himself has been pushing for bilateral trade agreements despite the warnings that the imports are surging.

Take the case of the proposed India-European Union trade agreement in the offing. The EU is insisting that India opens up by reducing import duties on wines and spirits, and also drastically cut back import tariffs on milk imports, from the present level of 60 per cent to 10 per cent. This will bring a flood of milk imports into India which ironically is the biggest producer of milk in the world. Importing cheap and highly subsidised agricultural commodities as well as manufactured goods is like importing unemployment. Because of the reduction in import duties of edible oil from 300 per cent to zero percent, for instance, India is now importing edible oils worth Rs 60,000-crores every year.

While economists are hammering the Rs 1.25-lakh-crore food security bill saying that such massive public outgo will add on to the fiscal deficit, no mention is ever made of the Rs 30-lakh-crore that has been doled out the industry since 2005-06 in the form of tax concessions. But despite the huge subsidy, the industrial output had been steadily on a decline. In May 2013 it stood at minus 1.6 per cent, exports have remained subdued, manufacturing has been almost killed. So wasn’t the tax exemptions a wasteful expenditure? If recovered, the tax exemption alone could have wiped out the country’s entire fiscal deficit.

Had the massive tax concessions to India Inc., which is clubbed under the category of ‘revenue foregone’, were instead invested within the country, it could have created millions of jobs. While industrial production remained dipped, equally shocking is the massive hoarding of cash that the private sector has been stacking. By Mar 2012, India Inc was sitting over cash reserves of Rs 10-lakh-crore. There is no need for India to bend backwards to attract foreign direct investments when its own corporate were sitting over a mountain of cash. Forking it out could have created investor’s confidence and improved the business sentiments.

On top of it, a Credit Swiss report shows that the top ten big corporate groups in India have shown a six-fold increase in external commercial borrowings to reach a staggering Rs 6,30,000-crore. But these massive borrowings did not result in adequate returns thereby increasing the external debt. With so much of external borrowings and with cash reserves growing, what prompted the Govt to provide hefty tax concessions year after year needs to be investigated. In the last two years alone, Rs 11-lakh-crore has been doled out. 

  

Sadly, all this was allowed to happen when the Prime Minster knew that free market policies and deregulation were behind the economic woes. Instead of taking appropriate corrective steps he allowed the Indian economy to dither and slide. This is where he faltered. In fact, the solutions that are being proposed to prop up the ailing economy are the same that initially led to the economic downturn. More of the same, will only add to the crisis. 

Subsidy for the hungry is not an economic misadventure.

For the last few years, every time I have participated in TV discussions on the Budget day, I have noticed how the stock markets play its mischievous card. Before the finance minister gets up to present the Budget in Parliament, the Sensex invariably slumps. This indicates the nervousness in the market. As the finance minister goes on reading his speech, the Sensex also steadily rises. This is nothing but a blackmail strategy that markets use across the globe.

So when a day after the UPA government passed the Food Security Bill, the stock markets fell by 590 points, I wasn't the least bit surprised. Nor should it be considered as an expression of an economic blow. It is simply the market's way to express its discomfort and contempt at the poor getting the subsidy benefit.

The Food Bill is expected to cost Rs1.25 lakh crore.

This has prompted the industry barons, economic commentators, and the business media to repeatedly ask the question: Where will the money come from? More so, at a time when the Indian economy is in crisis, and the rupee is in free fall, such a massive financial outlay for 810 million poor and hungry is being touted as a political misadventure. There is no need to feed the poor, the money should have instead been diverted to create infrastructure, and in the bargain create more jobs, goes the refrain.

This is not the first time that such a question has been raised. I remember when the UPA-I announced writing off Rs 62,000 crore (which later became Rs 72,000 crore) of outstanding loans to farmers, a similar hue and cry was raised. I too was faced with a volley of questions on TV channels the day the farm loan waiver was announced. When I asked where the resources for the Sixth Pay Commission, bringing in an additional burden of over Rs1.5 lakh crores every year, came from; there was no answer.

`Subsidies' is a bad word when it comes to the poor. The argument is that subsidies are a drain on the national exchequer, and add on to the fiscal deficit. So whether it is fuel subsidy, fertiliser subsidy or food subsidy, they have perpetually been on the chopping block. All these subsidies not only have provided safety net to India's teeming millions, but have also helped the country become self-sufficient in food and dairy production. It has provided a cushion to the aam aadmi against continuously rising inflation, and at the same time help minimise the impact of rising costs resulting from privatisation of health and education services.

But interestingly, while all eyes are on the subsidies being given to the poor, there is no mention of the massive subsidies being doled out to business and industry years after year. The only difference being that these subsidies are not called subsidies (because it is a bad word) but are classified as efficiency incentives. Since 2005-06, the government has been giving tax concessions, including income-tax concessions, to the industry which is clubbed under the category of `revenue foregone'. Till this year, the tax concessions to industry total to more than Rs 30 lakh crore. In this year's Budget, finance minister P. Chidambaram has allocated Rs 5.73 lakh crore as revenue foregone.

I didn't see the Sensex crashing to express its displeasure at this massive subsidy . Nor do I find any mainline economist ever mentioning that Rs 30 lakh-crore was a wasteful expenditure. After all, despite such a massive subsidy support, the industry output is in minus, the manufacturing sector is gasping for breath, and exports are not picking up. India is faced with jobless growth, and we see a spate of suicides in the urban areas across the country among those who lost their jobs. Does it not mean that the Rs 30 lakh-crore subsidy has gone into a black hole?

In past three years, roughly Rs15 lakh-crore has been given to industry as tax concessions. If this money had been recovered and invested in public infrastructure, not only the entire fiscal deficit would have been wiped out, but lakhs of jobs could have been created.

In addition, despite the downturn in economy, the Reserve Bank of India has admitted that India Inc. is sitting comfortably over a cash reserve of  Rs10 lakh-crore. There is no need for India to bend over backwards to attract foreign direct investments when its own corporates were sitting over a mountain of cash. Forking it out could have created investor's confidence and improved the business sentiments. The rupee would start to look up. The ensuing economic crisis should have been evident in the period 2004-2008 itself when India's economy grew at nine per cent. Behind all the jubilation, a startling study done on behalf of the Planning Commission should have served as an eye-opener.

Accordingly, in the period of high economic growth, 14 million jobs were lost in agriculture, and another 5.3 million in manufacturing. In other words, both agriculture and manufacturing sector became victims of high economic growth. Subsequently, it has now been shown that for the first time in history the number of landless agricultural workers has swelled to more than those who own land.

Agriculture has become a losing proposition. Every day, some 2,500 farmers are quitting agriculture and probably migrating to cities looking for menial jobs. This is no `inclusive growth'. Kaushik Basu, the former chief economic advisor to Prime Minister and now a chief economist with the World Bank, has himself admitted that the time of `inclusive growth' is over. He has tweeted, suggesting `intelligent growth' to be the new plank of economic growth.

The only way to bring prosperity into the rural areas, and thereby boost the country's economy, is by making agriculture sustainable and economically viable. Most importantly, the road to all-around economic development passes through the village of Hiware Bazaar in Maharashtra.Once a drought-prone village, where rural-urban migration was the only way to survive, this village now boasts of 60 millionaires.

This village has effectively demonstrated how an ecologically devastated landscape can become a bustling market place. It is, therefore, time to invest in agriculture, rural development and food security. That's where the future of India lies.

Source: Deccan Chronicle, Aug 29, 2013. bit.ly/1ciCseP

The corporate mega soap opera on Indian News TV Channels. It's pure entertainment, but with a hidden message.

The plot is getting thicker. I am waiting for the next twist in this mega soap opera. Yes, I am talking of the soap that is telecast every evening on prime time on most TV channels (some TV channels of course have been telecasting good discussions on other topics as well). The way corporate India has dressed up its PR agents, and lined them up as a rogue cast, every evening on the chat shows, I find it often very amusing, hilarious, and sometimes very irritating and disgusting. It has all the ingredients of a saas bahu serials, and of course a lots more.

For a number of days now, they found fault with the slow moving policies, which according to them lacked action. They talked of 'policy paralysis' and tried to play down the mega corruption that has hit the Congress-led UPA rule, and of course mentioned 'crony capitalism' as a matter of fact, and nothing more. Then came the news that 12 panchayats in Niyamgiri region had turned down the multi-billion dollar Vedanta empire to set foot, some of them were visibly angry. After all, how could a bunch of scantily-clad tribal stop the might of a business tycoon. So they ran down the Supreme Court which directed the public hearings, and blamed the judiciary for coming in the way of economic growth.

It didn't stop here. Many of them then questioned the delay caused due to the refusal by Ministry of Environment & Forests to grant them automatic clearance as a result of which some of the major investments were held up. They of course welcomed when Prime Minister set up a National Investment Board for fast-track clearance for industrial projects. And now I am told the Prime Minister has directed his officials to sort out all pending investments proposals and see to it that these are cleared before he departs in October to meet US President Obama on the sidelines of the UN General Assembly session.

Isn't that interesting? Prime Minister of a so-called democratic country preparing to present a report card to the world's most powerful CEO? No wonder, the Indian economy is in doldrums.

All hell broke lose the day the Lok Sabha passed the Rs 1.25 lakh crore food security bill. All the corporate actors on the TV shows were visibly angry. Unmindful of the fact that the nation was watching them, they went on to lash out at the wasteful expenditure at a time when the economy is in crisis. Some of them even went to the extent of saying that the poor didn't need to be given cheaper food. Another, who is quite a regular on TV nowadays, and I don't know why, defended the Rs 30-lakh crore tax exemptions given to the industry in the past 9 years. After all, with such a massive subsidy, good enough to wipe out hunger from India, the industry has failed to perform. industrial output is in minus, manufacturing has been destroyed, and joblessness is on the rise. So hasn't this massive subsidy gone into a black hole, I asked.

And then the Sensex dipped for a day. This is a usual practice with the stock markets whenever they want to blackmail the government into submission. It dipped 569 points, and the next evening went up by 500 points. Blackmail, isn't it? But this came in handy for the rogue artists to use the argument of market sentiments getting a blow with the food security bill. I have never seen such a blatant, and disgusting expression of contempt against the poor. This is shameful indeed.

Yesterday, one of the regulars went a step ahead. He even appealed to the middle class to come out and vote strongly against such measures that provide a safety net to the poor. I thought it was akin to inciting the audience to go for a class war. Now this is getting too much. Even Ekta Kapoor would have been careful. But then, the TV soap opera has no boundaries. The only prevention or precaution that it takes is that it doesn't criticise the Corporate world. They are the holy cows. They need all the subsidies if India's growth story has to go forward.

Remove environment hurdles. Provide them tax concessions, tax holidays. Give them land free of cost, or make it available to them at cheap rates. Forget about rehabilitating the displaced, the markets will take care of them. This is a small collateral damage in the path to growth, we are told. In short, while the State gives the poor with a Right to Food, the State needs to give the Corporates a right to poison the environment, and also a right to open loot. So far this is the message I get.

The soap opera continues. Let us wait and watch for what happens next.

The onion story. It was all planned. Didn't I say that earlier?

A few days back, I had written about the urgent need to tame the wholesale/retail trade in onions. This was of course not liked by those who swear in the name of market reforms. They believe that markets have the inherent ability to correct itself, and that the onion price rise was because of poor storage, wastage and of course the weather going wrong.

The Times of India today (Aug 25, 2013) has a detailed report, entitled Traders make Rs 150-crore in 4 days with hoarded onions (click on the link: bit.ly/17d5ZmZ ). It's investigation shows that traders had mopped up onions from farmers in June/July and even earlier for a price not exceeding Rs 1,500/quintals (or Rs 15/Kg) and had stored it at different places. This created an artificial scarcity.

Between Aug 9 and Aug 19, and more sharply in just four days in between, the demand peaked and the traders made a huge killing. Wholesale prices shot up to Rs 4,300/quintal on Aug 12 and then to Rs 4,500/quintal on Aug 13. That is how the entire carnage was planned and executed.

Further, the report quotes the deputy registrar of the Nasik APMC  (Agriculture Produce Marketing Committee), which is the epicenter of onion production in the country. Accordingly, even now "farmers have around 2.5 lakh tonnes, of which 1.35 lakh tonnes are in the 66 villages under Lasalgaon APMC. This shows supply crunch was artificial." 

Reading all this, and looking at the accompanying illustrations, I am sure your blood would boil. You would definitely want the Govt to crackdown on the trade. But look at what the Chairman of the Commission for Costs and Prices (CACP) Dr Ashok Gulati is suggesting. In an article in the Indian Express a few days back: Know your onions (Aug 22, 2013, http://m.indianexpress.com/news/know-your-onions/1158278/), he doesn't propose any strict action against the erring trade. He thinks corruption by the private trade is justified since it is also happening elsewhere. So he is lobbying for setting up processing industry and an efficient value chain (which means more cold stores etc). He is not alone. Read any market ideologue, and you will find him/her quiet when it comes to a crackdown on corrupt practices. I don't understand why all pro-market reformists are supportive of corrupt and dirty marketing practices. There may be some honourable exceptions, but most fall in this category. Remember Kaushik Basu, he went to extent of suggesting legalising giving bribes as the answer.

This makes me wonder why do we nab petty thieves and criminals. If bigger fish can be allowed to get away in the name of market reforms, why not the smaller culprits? #

To know more: Watch this NDTV India discussion on the politics of onions.
http://khabar.ndtv.com/video/show/news-point/286927

Your money, My Growth.

For Cos, it's 
Mera Gaon, Mera Growth (My village, My growth) 
This headline from Economic Times yesterday (Aug 23, 2013) caught my attention. It made me once again don my thinking hat. The news report says: Even as city dwellers tighten their purse strings, 700 million rural Indians are ready and willing to spend. Knowing that rural market is still growing at 10-14 per cent, industry majors have either shifted or plan to launch a new marketing strategy luring the poor in the villages to spend more, and spend on non-essential goods.

This report comes at a time when the Indian Government is getting ready to provide subsidised food to 75 per cent of the rural population under the Food Security bill.

For a country which is caught in the matrix of growth, where growth is the new economic superstition that has been sold very effectively and widely, everyone believes that if growth happens, their lives would be better. After having sold this mantra, the trend is now to measure everything in terms of growth. If India Inc manages to extract whatever little remains in the pockets of rural poor, it becomes growth. If you empty your family silverware in the market, and become a pauper in turn, it adds to country's growth. Strange, isn't it?

I have seen Cafe Coffee Day and Barrista and the likes opening up new joints in the mofussil towns. Instead of offering me lassi, I am surprised when some farmers offer to take me to these joints for a cup of coffee. Not that they have enough money to splurge, but by inviting me to the new coffee joint where a cup pf coffee costs not less than Rs 150, they are trying to show they too have arrived. It is a symbol of prosperity (howsoever hollow it may be) that they want to demonstrate. Of course, while the farmers pocket gets empty, it adds to country's growth. Hindustan Lever, for instance, has launched an 'Operation Bharat' to tap the rural markets for fairness cream, toothpaste, Clinic Plus shampoo, Ponds cream etc etc. ITC's much publicised e-chaupals have now turned into a rural marketing chain for most FMCG products. The list is endless.

All these years, economists tell us that the terms of the trade for rural areas had been negative. The rural Current Account Deficit (CAD) had always been in red. Which means more money was being taken out of the villages than what was being invested. But over the last few years, I am sure economists must be thinking of a new terminology to correctly depict the virtual day light robbery that is taking place in the rural areas. Poor are poorer, and the share prices of India Inc have been on an upswing. Isn't this a massive transfer of money from the rural to a few in the urban areas? How can it be called growth if it makes more people relatively more poor? Time to think.

I am waiting for the day when the Economic Times headline is rewritten as: Mera Gaon, Gaon ki Growth (My village, it's growth). Till then, growth is another name for exploitation.