Loan waivers cannot be a panacea

Loan waivers, subsidies and concessions cannot be a permanent measure to combat poverty. Sweat and toil alone can alleviate poverty. It is the responsibility of the governments to provide ample opportunities for the teeming millions to provide enough work to them and physically and mentally equip them to work and eke out lively-hood.  

However, gigantic irrigation projects and industrial units provided large scale employment opportunities. From early seventies, with the nationalisation of the banks, initially bank loans at marginal rate of interest were introduced and considered a right by the citizenry. Loan Melas were held all over the country. It was a limited awakening. In course of time the awareness has gone out of proportion and a 'a free for all' mindset was created.   

Rajiv Kumar, Chairman NITI Ayog, (THI, Dec,20,2018) has rightly said: "We are concerned with the employment situation. In fact, I am one of those economists who has said our policy targets could well be in terms of employment maximization and growth will come of out of that." Farm loan waiver cannot be an eternal solution for removal of poverty. 

Providing employment opportunities alone is an all- time remedy “ I hasten to add that, since the state governments reimburse the  farm loans to the banks,  loss on that account  may not be as huge as projected by the vested interests.  But it creates lethargic attitude and laziness. Instead, a practical solution is a working remunerative price for all the products of the farmer.  

 - K C Kalkura,  Kurnool

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State after State is resorting to farm loan waivers, especially in three Hindi heartland states where the Congress has come to power recently. The narrative of farm loan in elections started with the VP Singh government in 1990 when it abolished 10000 crore worth of farm loans. In 2008-09 Union budget the UPA waived 71000 crore across the nation. In 2014 general elections AP and TS promised waiver of loan. 

Then Tamil Nadu , UP, Punjab, Karnataka followed suit  at the time of their respective Assembly elections. So far 77000 crore worth of loan waiver has been announced across the nation and effected waiver for  68000 crore only. In an estimate  2.7 lakh crore fund is needed to clear the farmers loan in the country. Even after spending this much money there is no let off in farmers' suicide as 46 farmers per day on average, are committing suicide and nearly 3 lakh farmers were forced to die after 1995-96.

So it tells the volatile situation in the agriculture may not be rectified only with loan waiver . Thus it is need of the hour to get remunerative prices to the agricultural products, implementation of effective insurance scheme, finding a way to mitigate climatic conditions besides focusing on irrigation sector and extending scientific developments to the fields. In this the case the government must ponder over implementation of the Swaminathan commission  recommendations. Then only the farmers will be wealthy and the government and in turn it strengthens the economy. 

 - Pratapa Reddy Yaramala, Tiruvuru