The Hindu : National : Vidarbha gets raw deal in loan waiver: VC’s report

Online edition of India's National Newspaper
Monday, Aug 11, 2008
ePaper | Mobile/PDA Version

National

National

Vidarbha gets raw deal in loan waiver: VC’s report

Rahi Gaikwad

Mumbai: The Vidarbha region accounts for the maximum number of suicides, yet it gets a poor share of loan waiver compared to western Maharashtra, according to a report by Narendra Jadhav, Vice-Chancellor of Pune University.

Six districts in western Vidarbha — Amravati, Akola, Yavatmal, Buldhana, Washim and Wardha — recorded the highest number of suicides between 1997 and 2005. And Yavatmal has seen the most number of suicides.

Equitable share

The report says the Rs. 71,680-crore waiver announced in the Union budget 2008-09 allots an equitable share to Maharashtra, as per its population percentage in the country. However, within the State, the distribution is skewed and fraught with regional imbalances.

Maharashtra’s share in the waiver is Rs. 9,896 crore (13 per cent). Out of this, the western region gets 53 per cent for 19.48 lakh account holders, whereas Vidarbha gets 20.1 per cent for 12.31 lakh account holders. Yavatmal gets the rawest deal with only Rs. 14,431 per head on average compared to Rs. 27,310 in western Maharashtra.

The dichotomy

The report points out the dichotomy between Vidarbha and western Maharashtra in the size of landholding and irrigation facilities. The former has large landholdings but poor irrigation, while the latter fares better in irrigation despite small landholdings. There are around 15 lakh farmers owning up to five acres in western Maharashtra. In Vidarbha, the number is only around 9.5 lakh. Therefore, as far as complete waiver goes, Vidarbha farmers benefit less.

Positive difference

The only positive difference is that farmers owning more than five acres will have their loan waived if it is within Rs. 20,000, which is not applicable in western Maharashtra. This will help many big farmers in Vidarbha as well.

To correct the imbalance, the report suggests various recovery structures instead of straightforward waivers for new loans. However, it should be done keeping in mind the areas hit by famine or scarcity.

“Historic”

It suggests increasing the scope of one-time settlement (OTS) and improvements in the rebate scheme. While the waiver is “historic” considering the volume of outlay involved, the measure is only a temporary relief necessary, but not sufficient. The bottom line is — agriculture is not viable any more, and more serious and diverse measures are needed to break the vicious cycle of indebtedness and waivers.

Apart from the Centre’s waiver, the report outlines various reasons for the continuing suicides in the State despite two packages for the six districts in western Vidharba — the Maharashtra government’s relief package and the Prime Minister’s Relief Fund.

Long-term schemes

Both packages focussed on long-term schemes such as irrigation as opposed to provision of “immediate relief.” They were thus “backloaded” aiming at long-term support — instead of being “frontloaded” aiming at immediate relief. For instance, 58 per cent of the PM’s relief fund was allocated for irrigation and 19 per cent went to banks as interest waiver. In effect, only 23 per cent went directly to the farmers in distress. The package, therefore, could not assure the farmers.

Other factors hindered smooth implementation. For instance, the implementing authority was transferred five times in two years and 30-40 per cent posts in the Agricultural department were vacant for four years.

Postal savings

The farmers could not reap full benefits of the packages as many were rendered ineligible for one reason or the other. Furthermore, full compensation was not given to them directly, and a large part of it went to postal savings. The farmers were given cattle, but with no means of rearing, many simply sold their livestock. Traders and contractors disbursing the relief extracted commissions.

Printer friendly page
Send this article to Friends by E-Mail

National