Loan waiver a boon or a bane?

The ‘rythu runa mafi (farmers’ loan waiver) scheme was the first big challenge for the Chandrababu Naidu government which seems to have been voted to power against several odds.

The Congress, which was in power in the previous term, but did not get even a single seat in the Andhra Pradesh Assembly and the relatively new YSR Congress which managed to win 67 seats are of the view the TDP has duped the farmers into voting for the party by promising total loan waiver.

The Telugu Desam said that it would keep its word no matter what the cost and announced it would waive the loans in instalments. Chief Minister N. Chandrababu Naidu in an interview to The Hindu last week said that his government had kept its word by waiving loans to the tune of Rs. 24,000 crore.

Andhra Pradesh State Planning Board Vice-Chairman C. Kutumba Rao said that loans to the tune of Rs. 7,720 crore were waived till now. The remaining Rs. 12,000 crore would be waived in four instalments. The State government had also committed itself to pay 10 per cent interest which would be another Rs. 3,000 crore. All this amounts have been factored into the budget and the government was committed to fulfilling it, Mr. Rao said.

While waiving the loan in instalments has become a boon for the government in a way, it is working out to be a bane to the farmers who have to pay additional interest, according to farmers’ association. Though the government is executing the waiver at a high cost, the farmers do not seem to benefit from it. At the end of two years, instead of alleviating the travails of the farmers, the ‘runa mafi’ scheme was accentuating them, the associations contended.

Double whammy

It appears to be a double whammy for farmers who believed the promises made by political parties at the time of elections. They neither got the promised loan waiver fully nor the benefits that are linked to crop loans. This loss to farmers in the form of benefits have to, however, be quantified.

“Farmers have lost 3 per cent incentive given by the Central government for timely repayment of loan for the second year now,” said Rythanga Samakya office-bearer and YSR Congress Farmers’ Wing chairman M.V.S. Nagireddy.

Andhra Pradesh Tenant Farmers’ Association president Vangala Subba Rao said farmers owe Rs. 87,500 crore to banks at the time of elections. The Telugu Desam told farmers not to repay as it would waive all loans. “The bankers were told not to put pressure on farmers to repay,” Mr. Subba Rao said. The proposed loan waiver in instalments would only increase the interest burden on farmers, Mr Subba Rao said and demanded that the entire amount be waived in one shot. The Planning Board Vice-Chairman, however, said that the figure of Rs. 87,500 crore and the Rs. 24,000 crore default penalty being quoted by farmers’ association was totally wrong. The real figures would be out at the State Level Bankers’ Committee meeting to be held in a couple of days, he said.

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Printable version | Jun 10, 2021 9:15:58 AM |

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