Expressing doubt over the effectiveness of farm loan waivers, Niti Aayog member Ramesh Chand said on Thursday that such schemes will not result in curbing farmer suicides.
Addressing a press conference in Mumbai, Mr. Chand said that instead of schemes such as farm loan waivers, Madhya Pradesh government’s Bhavantar Bhugtan Yojana (BBY) or the price deficit finance scheme would help farmers more.
Mr. Chand, while interacting with reporters in Mantralaya, said, “Out of the total farmers in the State, around 60% avail of loans. Only half of them go for bank loans, while rest depend on other means. Even of those who opt for bank loans, only 70% repay the loan amount. Therefore, the study shows that the loan waiver comparatively helps less number of farmers.”
Mr. Chand was in Mumbai to address spokespersons of the Bharatiya Janata Party (BJP) on the steps taken by the Central Government to address agrarian issues.
He said after the farm loan waiver scheme was introduced in 2008 and a large amount of money was disbursed by the Central government, the demand for such waivers rose in the next three to four years. Mr. Chand said, “The loan waiver scheme has not proved to be effective in extending financial stability to farmers. Authorities will have to think twice about spending such large amounts of money on such loan waiver schemes. Instead, price deficit finance schemes implemented in Madhya Pradesh would turn out to be more effective.”
Under the Bhavantar Bhugtan Yojana, the Madhya Pradesh government paid the farmers the difference between average prices at agricultural markets and the minimum support price. Mr. Chand said, “As of now, I have not heard of any adverse reports suggesting the scheme has gone wrong. We at the Niti Aayog feel that this is the way forward.”
