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E
conomic development of Maharashtra is today dominated credit, privatisation of natural resources, particularly water,
by the secondary and tertiary sectors. The primary sector intellectual property right restrictions, lack of access to new
is the laggard: of the State Domestic Product (SDP) at current markets and technologies, volatility of international tastes and
prices of Rs 21,22,160 million in 1999-2000, the primary sector prices, depressed farm gate prices of food articles due to cheap
contributed only 17.18 per cent primarily due to the poor perfor- imports will all impoverish the small (and marginal) farmers and
mance of agriculture. Between 1960-2000 agriculture grew at 2.92 agricultural workers by dampening on-farm employment and real
per cent per annum, only barely exceeding the population growth wages, at least in the short run.3 Globalisation has also seen the
rate of 2.24 per cent [GoM 2002b]. Inadequate precipitation and dismantling of policies that defended rural livelihoods (input
its uneven distribution have meant recurrent droughts: in 1965- subsidies, support prices for output, priority credit to agriculture,
66, 1970-73, 1984-87, 1992 and 2001-2003. It has also been to name a few) and the slashing of investment on agriculture
estimated that at any given time, 35 per cent of the geographical and rural development.4 Effects on the environment of market
area and 38 per cent of the population of the state is permanently driven consumption of fertilisers and pesticides, over exploitation
experiencing a drought [GoM 1987]. Combined with climatic of land and water may be expected to adversely impact overall
factors, the slow growth of irrigation (in spite of massive invest- productivity of agriculture in the near future unless preventive
ments, only 14.5 per cent of the net sown area was irrigated in measures are undertaken [Shiva 2002]. Under such conditions,
1999-2000), unviable farm size, unequal distribution of opera- it is clear that social security nets are indispensable for the
tional landholdings and lack of diversification have been the protection of the rural poor against market fluctuations: a strong
major stumbling blocks for agricultural growth. Yet, more than case exists not only for the continuation but also the expansion
60 per cent of the state’s workforce depends on this sector. The of the EGS. The scheme, in fact has the potential to change the
low elasticity of employment with respect to value added in face of rural Maharashtra if used imaginatively.
agriculture [Bhalla and Hazel 2003] limits the scope of rural The EGS will have to be restructured before it can function
labour absorption and productive employment. The result: preva- effectively as a poverty alleviation scheme. Restructuring implies
lence of high unemployment rates1 and widespread rural poverty more than merely filling in the lacunae that have emerged in the
characterised by high degree of instability of incomes. Estimates 30 years of its operation. Restructuring involves changes that
of the incidence of rural poverty in the state range from 24 per will transform the scheme into a true poverty alleviation tool
cent [GoM 2002a] to 38 per cent [Sundaram and Tendulkar rather than merely a fire fighting or relief operation (a hastily
2003].2 Despite the laurels earned and not withstanding official reformulated scheme would be self-defeating). Below we raise
claims of falling demand for EGS in the 1990s, it is obvious that some issues/questions that need to be debated in this context.
the scheme is as much needed today as it was in the early 1970s.
The opening up of the economy, particularly agriculture to EGS for ‘Relief’ or Poverty Alleviation
international trade in the 1990s has impacted farmers in many
ways. Changes such as liberalised export of agricultural products, Should EGS continue to be used, as it is today, as a relief
commercialisation/corporatisation of agriculture and the entry of operation or be extended to fight poverty? Using the scheme as
new technologies will favour resource rich farmers. In contrast, a tool against poverty implies looking beyond the effects of
other changes such as expensive inputs like seeds, fertiliser, poverty to the reasons that underlie it. Within the framework of