The ongoing protest by Indian farmers cannot go on indefinitely or will hinder 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 agricultural reforms that have been passed into law this year. Protesters said the new measures would lower crop prices and affect their incomes.
The protests affected agriculture and related industries, according to Indian Civil Aviation Union Minister Hardeep Singh Puri.
“This affects not only agriculture but other allied areas, and there is certainly harm,” Puri told CNBC’s Tanvir Gill when asked how much the protests disrupted agricultural production.
“We must continue. And after Covid, when the economy slowly returns to pre-Covid levels, there is a revival of demand, production, etc. We should not allow (the protests) to continue indefinitely, to put more effort into our revitalization efforts, “he said on Tuesday.
Farmers gather at the border between Delhi and Uttar Pradesh to 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 agricultural reforms. He reiterated the government’s position that the measures would benefit farmers and blamed the parties for “self-interest” for fueling farmers’ fears of reforms.
Puri said key measures, such as minimum support prices, would remain. Minimum support prices or MSPs are the prices set by the Indian government to buy certain crops – thus guaranteeing farmers a minimum profit for their harvest, regardless of market conditions. Trade unions fear that farmers could be paid less for their crops if the system is abolished.
Agricultural reforms are needed
Economists generally agree that India’s agricultural sector needs reform. Agriculture is the main source of livelihood for about 58% of India’s population, but accounts for about 15% of GDP.
The government has met several times with farmers’ representatives to try to resolve any disputes over the reforms – and has pledged to do so again, Puri said. The minister said he believed the government’s message to farmers was “starting to creep into their homes”.
I am sure that farmers, who are a very productive segment of our society, will stay with the government and find a way forward.
Hardeep Singh Puri
Indian Minister of Civil Aviation
“Any problem, no matter how serious, you can always find a solution. And the government is committed to finding the solution,” he said.
“And I am sure that farmers, who are a very productive segment of our society, will stay with the government and find a way forward.”
The protests come at a time when the Indian economy is spinning due to the effects of the Covid-19 pandemic. India’s economy fell by a record 23.9% year-on-year in the April-June quarter, following a tight nationwide blockade to contain the spread of coronavirus. The economic contraction slowed in the quarter ending in September, with the economy down 7.5% from a year ago.
However, the International Monetary Fund projected in October that the Indian economy will decline by 10.3% in the current fiscal year ending in March 2021.
– Saheli Roy Choudhury contributed to this report.