India-Russia ties in the neoliberal era

If last month's official visit by President Dmitry Medvedev to India came anywhere near being marred, it was from a most unexpected quarter — onions. Indians can't make curries without onions but now 80 per cent of them can't afford this vegetable. They were contemplating how to substitute onions with finely chopped leaks when Mr. Medvedev arrived.

Yet, the visit became a page-turner and the youthful President calmed the eye on our tired, jaded political landscape. The visit was “bound to be successful, in theory,” as an experienced Russian scholar coyly predicted. Not only the annual summit was meticulously choreographed but there is also a growing “bipartisan” interest in India in the relationship. The right-wing lobbies weaned on old-fashioned “anti-communism” that mocked at Soviet-Indian friendship, the Left which nostalgically (and simplistically) views Russia as the inheritor of Soviet legacies and the government with a pronounced “pro-American” tilt — all agree that India should have a privileged bond with Russia. No mean thing in our highly fragmented polity.

Only the common people and intellectuals — who used to constitute the vanguard of Soviet-Indian friendship — are missing from the spectacle. Ironically, 2010 was also the 55th anniversary of the historic visit by Nikita Khrushchev and Nikolai Bulganin to India but no one remembered. To be sure, the distinctive mark of summit 2010 in Delhi is that the “market forces” have penetrated the veins and arteries and even the capillaries of the two countries' relationship. Such things are probably part and parcel of our current neo-liberal era. But is that a good thing to happen? A reverse osmosis is happening in the Sino-Indian partnership. For China, public diplomacy in India has assumed great significance. Anyway, both Russia and India seem content with the way things turned out and are settling for a durable “strategic partnership” based on “convergence of interests,” uncluttered by ideals or ideology. There is, of course, no question of infidelity in such a partnership and no scope for adulterous acts — not even flirtatious intimacies. An extraordinary calmness has come to prevail, which is truly rare in relationships.

Reform in the Countryside: The agriculture sector and rural economy should be the centerpiece of Budget 2011-12

Union finance minister Pranab Mukherjee will soon begin confabulations with industry leaders and sectoral experts on the formulation of Budget 2011-12. Like Manmohan Singh and P Chidambaram in the past, will he deliver an historic budget? Singh as finance minister in 1992 launched the Indian economy's liberalisation by encouraging foreign investment and slashing import duties, which was to put an end to the 'Hindu' rate of economic growth. Chidambaram as finance minister in 1997 announced substantial reduction in income and corporate taxes, leading to buoyant tax collection in future years. Mukherjee in 2011 can present a path-breaking budget by focussing on the rural economy and agriculture sector, which can set India on a permanent high growth trajectory of over 10% in the foreseeable future. 

While the reforms and budgets of the last two decades have produced a vibrant urban economy, their impact on the rural economy has been minimal. Past budgets have seen farmers being pampered with sops and subsidies that have created an extreme dependence on the government among people living in rural areas. Except for the mode of production linked to the farmer, government is the biggest provider of services and buyer of goods produced in the rural economy. 

Schools, hospitals and most other essential services in rural India are mostly government-run and, with the introduction of the Mahatma Gandhi Rural Employment Guarantee scheme five years ago, the government has become the employer of the first resort. The farmer also gets from the government free electricity and subsidised credit and fertilisers for production of crops. Most commodities thus produced are procured by the government through the minimum support price (MSP) mechanism. 

The rural economy needs an impetus to get out of this rut. The upcoming budget provides Mukherjee an opportunity to lay out a vision for transitioning the rural economy and agriculture sector into the market economy.