
Farm bills will reduce role of middlemen, enhance efficiency: IMF
- 2021-01-15
NEW DELHI [Maha Media]: The IMF believes the farm bills passed by the Indian government have the potential to represent a significant step forward for agricultural reforms, but a social safety net is needed to protect those who might be adversely impacted during the transition to the new system, a spokesperson of the global lender said here, according to a news agency report. Gerry Rice, Director of Communications at the International Monetary Fund (IMF), said the new measures will reduce the role of the middlemen and enhance efficiency. "We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India," Rice said at a news conference in Washington on Thursday. "The measures will enable farmers to directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, enhance efficiency and support rural growth," he said. "However, it is crucial that the social safety net adequately protects those who might be adversely impacted during the transition to this new system," the spokesperson said responding to a question on the ongoing protests by farmers against the laws in India. This can be done by ensuring that the job market accommodates those that are impacted by the reforms, he said. And of course, the growth benefits of these reforms will depend, critically, on the effectiveness and the timing of their implementation, so need to pay attention to those issues as well with the reform," Rice said. Thousands of farmers, mostly from Punjab and Haryana, have been camping at several Delhi border points, demanding a complete repeal of the three farm laws and legal guarantee of minimum support price for their crops. Enacted in September last year, the three laws have been projected by the Centre as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country. Gender equality has been lagging in India, though the government has done a "commendable" job on the monetary policy and the fiscal policy side to deal with the economic consequences of COVID-19 pandemic, says the International Monetary Fund. "Women are front line workers, but they are also, by and large, in the contact intensive industries hit. They are often in the informal economy, help cannot easily reach them, so they are hit," said Kristalina Georgieva, managing director. "Labour market participation in India for women has been low. It is shrinking," she said, and that the government need to pay more attention to the issue. "I know the government is paying attention, it is moving in that [direction], but there is so much space to tap into the productive potential of women and the entrepreneurial potential of women," said Georgieva during a media interaction on Thursday. She said India has taken "very decisive steps" to deal with the pandemic and to deal with the economic consequences of it. On the pandemic side, India went for a very dramatic lockdown for a country of this size of population with people clustered so closely together. And then it moved to more targeted restrictions and lockdowns. "And what we see is that that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before COVID in India, meaning that economic activities have been revitalised quite significantly. "What the government has done on the monetary policy and the fiscal policy side is commendable. "It is actually slightly above the average for emerging markets. Emerging markets on average have provided six percent of GDP. In India this is slightly above that. Good for India is that there is still space to do more." The IMF official said 2021 is the year to use that space but use it wisely in "a more targeted manner" and to support an accelerated transformation of the economy. "I would finish by saying that I am impressed by the appetite for structural reforms that India is retaining. We welcome that," she said, asking India not to give up on structural reforms.