Former RBI Governor Y.V. Reddy said farm loan waiver was not good for “economic or credit culture” and insisted that ultimately it was a political decision and cannot be justified in the longer run.
Another former RBI chief C. Rangarajan took a similar line, saying the alternative is to offer farmers a longer window to pay off.
Dr. Reddy said that every political party had offered such waiver in some State or the other or at an all-India level. Punjab, Uttar Pradesh and Maharashtra recently announced farm loan waivers.
