The RBI Governor’s anguish that debt waivers constrain credit flow to the farmer is understandable, and quite rightly so (“ >Farm loan waivers hit credit flow: Rajan ,” Dec.28). Be it the UPA government in 2008 or Chief Minister K. Chandrasekhar Rao and Chief Minister N. Chandrababu Naidu in 2014, agricultural debt waiver and relief schemes have always been used as means to win elections while ignoring the practical problems and economic impact they hold. Studies by the Public Accounts Committee, the CAG and various other agencies have revealed that in many cases, deserving farmers have been overlooked, which carries fraudulent connotations. This defeats the very purpose of the waivers, and results in huge losses to the exchequer. As a banker, it has been my experience that such schemes act as a disincentive even to those farmers who used to pay their instalments without fail. They have now stopped, saying “chunav aane do, dekhenge” (let elections come, we’ll see). All those political parties indulging in such financial misadventures at the cost of the exchequer should heed the advice of the RBI.
B. Harish,
Mangaluru
It is a fact that the waiver of agricultural loans and the grant of indiscriminate subsidies to farmers have not benefited them but in fact caused them untold misery and resulted in an agrarian crisis. This is clear from the farmer suicides in Telangana despite a waiver of such loans and the availability of various state subsidies. More than money, farmers need assistance in the form of assured water supply, uninterrupted power, improved seeds, modern farming techniques, remunerative prices for the produce and a boost to their self-confidence. Political parties should refrain from implementing various wild schemes without measuring their deleterious consequences on the economy.
Kshirasagara Balaji Rao,
Ramayampet, Telangana
From 1989, the rate of credit flow to farmers has declined. More than 50 per cent of agricultural credit goes to urban areas in Maharashtra, which is transferred to the business sector. How do we regulate this credit flow? Further, there are questions about the impact of loan waivers and the issue of farmer suicides. There needs to be a comprehensive study of the issue, followed by urgent reforms.
Vaibhav Gaikwad,
Ahmednagar, Maharashtra
