The United Progressive Alliance government’s loan waiver scheme of 2008 helped it retain power in 2009 (“In largesse we trust”, April 6). Since then, political parties have dangled the carrot of farm loan waivers to woo voters. There are existing provisions to help farmers who are not able to repay loans for reasons that are beyond their control (natural disasters or an unexpected crash in market prices). Relief could include rescheduling of repayment instalments, converting accumulated interests into long-term loans to be paid after a holiday period, reduction in interest rates, and so on. Loan write-offs could be considered on a case-by-case basis depending on the protected nature of the distress. An across-the-board loan waiver does not make any distinction between farmers who have not been affected in any way and those who face agrarian distress owing to various reasons.
However, it is unfair to blame the political class alone for resorting to fiscal adventurism to capture or retain power. The voters seem to be easily enticed by promises of loan waivers without considering the fact that the beneficiaries will have to share the burden of the waiver money along with the larger society in one form or another. The simple yet unacknowledged fact is that money for the waiver has to come from somewhere. In the long term, loan write-offs will come to bite all of us in one way or another in the form of unforeseen costs.
V.N. Mukundarajan,
Thiruvananthapuram
Farm loan waivers have become sops that populist politicians misuse with no regard for the welfare of farmers and the development of agriculture. Uttar Pradesh, which is the largest contributor to India’s agricultural output, deserves better in terms of follow-up policies enabling greater infrastructure investment, better technology, crop insurance systems, and plugging leakages in the field-to-market chain. The farm economy needs to be strengthened. We must empower farmers to claim their remuneration instead of letting the middlemen and cartels rob them of the price of their efforts. Loan waivers are only momentary relief; hence, an efficient long-term agricultural policy is to be framed to stop this vicious cycle of debt and distress across India.
Salini Johnson,
New Delhi
While larger plans to improve the farm sector are welcome, the loan waiver scheme of the BJP in Uttar Pradesh and the order of the Madras High Court directing the Tamil Nadu government to extend a similar farm loan waiver scheme for small farmers can’t be dismissed as an ominous trend for a country that could face a Malthusian nightmare in the future. With the country’s population projected to increase, with the continuing loss of huge swathes of farmland to industry and real estate, and with the massive displacement of farm labour, could India slide back into the dark days when it imported wheat under PL-480 from the U.S.? There is widespread concern that the exchequer has lost trillions of rupees in nearly a decade in distributing tax largesse to industry, besides trillions in non-performing assets with the public sector banks, created largely by the rich and famous. Any farm loan waiver across the country will be chicken feed in comparison.
Kangayam R. Narasimhan,
Chennai
