The ongoing protest from Indian farmers cannot go on indefinitely or it will slow the country’s economic recovery from the Covid-19 pandemic, an Indian government minister told CNBC on Monday.
Thousands of Indian farmers have been protesting for weeks against three agrarian reforms that were passed into law this year. Protesters claimed the new measures would lower crop prices and hurt their earnings.
The protests have harmed agriculture and related industries, according to Indian Minister of Civil Aviation, Hardeep Singh Puri.
“This affects not only agriculture, but other related areas, and there is certainly damage,” Puri told CNBC’s Tanvir Gill, when asked how much the protests disrupted agricultural production.
And after Covid, when the economy is slowly returning to pre-Covid levels, there has been a revival in demand, production, etc. We must not allow (the protests) to go on indefinitely , to further set back our revival efforts, ”he said Tuesday.
Farmers gather at the Delhi-Uttar Pradesh border in protest against new agricultural laws.
Sakib Ali | Hindustan Times | Getty Images
The minister, who is also in the Ministry of Housing and Urban Affairs, defended the agricultural reforms. He reiterated the government’s position that the measures will benefit farmers, and accused parties with “vested interests” of sparking farmers’ fears about the reforms.
Puri said important measures, such as minimum support prices, will remain. Minimum support prices or MSPs are prices set by the Indian government to buy certain crops, guaranteeing farmers a minimum profit for their crop regardless of market conditions. Unions fear that farmers may be paid less for their crops if the system is discontinued.
Agricultural reforms needed
Economists generally agree that India’s agricultural sector needs reform. Agriculture is the main source of income for about 58% of the Indian population but accounts for about 15% of the GDP.
The government has met with farmers’ representatives several times to try to resolve any grievances about the reforms – and is determined to do so again, Puri said. The minister said he thinks the government’s message to farmers is “starting to trickle home”.
I am sure that the farmers, who are a very productive part of our society, will sit down with the government and find a way forward.
Hardeep Singh Puri
Indian Minister of Civil Aviation
“Any problem, no matter how serious it is, you can always find a solution. And the government is determined to find the solution,” he said.
“And I am sure that the farmers, who are a very productive part of our society, will join the government, and we will find a way forward.”
The protests come at a time when the Indian economy is reeling from the effects of the Covid-19 pandemic. The Indian economy shrank by a record 23.9% year-on-year in the April to June quarter following a strict nationwide freeze to stem the spread of the coronavirus. The economic contraction eased in the quarter ending in September, with the economy contracting 7.5% from a year ago.
Still, in October the International Monetary Fund predicted that the Indian economy would contract 10.3% in the current fiscal year ending March 2021.
– Saheli Roy Choudhury contributed to this report.