India Takes Small Steps toward Economic Freedom with New Agrarian Reforms
Over the past thirty years, India has experienced some periods of economic liberalisation, but the country still retains many aspects of its former periods of widespread state control of the economy.
In recent weeks, we’ve seen some new efforts at liberalisation once again. For example, three farm bills (now acts), namely the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and Essential Commodities (Amendment) Bill have led to protests within and outside the parliament. The reforms were initially announced as a part of the national economic relief package, popularly called Atmanirbhar Bharat (self-reliant India), in May 2020. The government claims that these reforms will lead to an increase in farmers’ incomes, in line with its ambitious target of doubling them by 2022.
Essentially these laws liberate the farmers from the clutches of state control and provide them the freedom to manage their supply and trade. Farmers have long had to sell their harvests at government-designated markets where the balance of power is in favour of the middlemen, reducing the bargaining power of the farmers. The restrictions and regulation of supply and trade of agricultural produce led to artificial determination of prices. While it is true that when legislation regulating the supply came into effect India faced food shortages and scarcity, the regulations’ persistence into the modern era is nothing less than astonishing. This is probably due to the fact that India had to undertake liberalising reforms in 1991—beginning India’s most significant liberalisation period—due to dire economic need rather than an ideological shift in policymaking.
Article from Mises Wire