Such sops largely benefit the undeserving, bring the Union and States’ budgets under stress and increase NPAs of banks The reports of a district administration ordering the auction of the land of several farmers in Rajasthan to recover their dues to public sector banks are shocking. Land is the only asset that a farmer, especially small and marginal, has and if it is taken away, this will lead to permanent incapacitation impairing the person’s ability to earn a livelihood. The dues piled up because the farmers did not pay back because in the run-up to the 2018 assembly elections, then Congress President Rahul Gandhi had promised loan waiver and that too within ten days of his party Government taking charge....
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Category: Credit & insurance
Loan waivers enrich undeserving
The reports of the district administration ordering auction of the land of several farmers in Rajasthan to recover from them the dues of public sector banks (PSBs) are shocking. The land is the only asset that a farmer especially small and marginal has and if it is taken away, this will lead to permanent incapacitation impairing his/her ability to earn a livelihood all through his/her life time. The dues had piled up because the farmers did not pay back as during the campaign in the run up Assembly elections in the State (2018), the then President, Indian National Congress (INC), Rahul Gandhi had promised loan waiver and that too within ten days of the INC-led Government taking charge. But, it...
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Loot in farmers’ name continues unabated
A high level committee on ‘road-map for agriculture and rural sector in the next five years’ has recommended corrective steps to reduce agricultural subsidies and use the money thus saved [it has estimated the savings to be Rs 10,000 – 15,000 crore annually] for investment in rural areas for creating livelihood opportunities by empowering Farmers- Producer Organizations [FPOs], Joint Liability Groups [JLGs] and making small and marginal farmers diversified producers. It has also suggested providing FPOs and other forms of collectives a proper eco-system to grow and diversify operations. The government spends close Rs 450,000 crore on agricultural and food subsidy every year. This includes food: Rs 175,000 crore; fertilizers: Rs 100,000 crore; PM-KISAN: Rs 90,000 crore; power [centre plus...
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Agri-credit not going where it should
Successive governments have show-cased loans from scheduled commercial banks [SCBs], state cooperative banks [SCBs], district cooperative banks [DCBs] and regional rural banks [RRBs] [also referred to as institutional loans] to farmers at concessional rate of interest as demonstration of their commitment to help them increase their income from agricultural and allied operations. Modi – government has often proclaimed this as one of the potent instrument of doubling farmers’ income by 2022. The total amount of agricultural credit increased from about Rs 915,000 crore during 2015-16 to Rs 1065,000 crore during 2016-17 and further to Rs 1170,000 crore during 2017-18. As per directives of the Reserve Bank of India [RBI], farmers get short-term crop loans up to Rs 300,000 at subsidized...
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Doubling farmers’ income – FPOs could be game changer
During the last five years, Modi – government has implemented measures such as increase in irrigation, issue of soil health cards [SHCs], neem coating of urea, crop insurance [at minimal premium], building rural roads, e-NAM [electronic national agriculture market], increase in credit availability and implementation of Dr Swaminathan committee recommendation to give minimum support price [MSP] equal to 150% of the production cost. These measures aim at increasing crop output, enhance efficiency of input use, fetch higher price from sale of agricultural produce and do on-farm value addition with the overarching objective of doubling farmers’ income by 2022. Further, to augment the income of small and marginal farmers [land holding < 2 hectare]. in the interim budget for 2019-20, it...
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Modi dismisses loan waiver, empowers farmers
The ‘chowkidar chor hai’ [a euphemism to describe prime minister, Modi as thief in the context of allegations against him on the controversial Rafale deal] jibe hurled by Rahul Gandhi during his election campaign in three Hindi heartland states ad infinitum – a charge that caught the imagination of the electorate – was a major factor contributing to BJP defeat [Supreme Court judgement exonerating Modi from the charge came after voting was over]. The other reason for the grand old party staging a come-back was a promise by its President for waiving farm loans. This was too much of a temptation for the farmers. Even those farmers who were in a position to repay decided not to pay in the...
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Farm loan waivers: road to economic disaster
The waiver of farm loans worth Rs 65,000 crore about a decade ago by the then UPA dispensation, with an eye on the impending general elections in 2009, had a debilitating effect on the finances of the union government (fiscal deficit during 2008-9 was in excess of 6% of GDP). But political parties do not seem to have learnt any lesson. Early last year, the BJP government in Uttar Pradesh granted a mammoth loan waiver for small and marginal farmers, costing the exchequer Rs 36,000 crore. This was followed by the by JD(S)-Congress coalition in Karnataka granting an equally massive Rs 34,000 crore waiver earlier this year. The monster of competitive loan waivers continues to advance with added fury as...
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Agriculture credit – small/marginal farmers face double whammy
A committee set up by the Modi – government to identify ways to double farmers’ income by 2022 has in its report [second volume] under caption “Status of Farmers’ Income: Strategies for Accelerated Growth” has stated “landless and marginal farmers depend more on the informal sources for credit for asset creation as compared to the medium and large-size landholders”. The committee goes on to state that “a higher percentage of investment is carried out through informal sources of borrowings such as moneylenders, traders and input dealers by the landless [40.6%], marginal [52.1%] and small farmers [30.8%].” On the other hand, the medium and large farmers avail most of the loans from financial institutions such as scheduled commercial banks [SCBs], state...
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Are credit institutions helping poor farmers?
Even as elections in India have turned into a day-in-day-out affair, two issues that political parties invariably focus on are (i) alleviating farmers distress and (ii) promoting inclusive development taking all sections of farming community on board. Yet, what is happening on the ground is the reverse of what is proclaimed. The more parties promise addressing farmers’ plight, the more the latter end up getting further impoverished. The more they harp on ameliorating the conditions of farmers from backward classes, the more they get entrenched in backwardness. A vivid manifestation of this dichotomy between what is preached and what is in practice is available from a research paper by Chirala Shankar Rao [an assistant professor at the Council for Social...
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PMFBY – no panacea for farmers’ woes
Farmers in India are constantly under the threat of drought and other natural calamities such as floods, hailstorms, pest attacks etc leading to unprecedented loss of crop output. Unable to pay back loans [taken for growing crop and personal consumption needs], tens of thousands of them commit suicide every year. During a recent hearing, the Supreme Court [SC] reprimanded the union government for its slow and inadequate action in dealing with the problem. But, the latter put up a strong defense citing launch of Pradhan Mantri Fasal Bima Yojna [PMFBY] though Attorney General, KK Venugopal [who argued on its behalf] opined it will take time for the impact to be felt on ground. Under PMFBY, a farmer is compensated for the crop...
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