New Delhi: Amid reports that the massive farm loan waiver by the big states could be a staggering 1.3 per cent of the GDP, The Narendra Modi Government has said there are no plans of giving loan waiver to farmers in near future.
Answering to a written reply in Rajya Sabha on Tuesday, minister of state for finance Shiv Pratap Shukla said “No farm loan waiver scheme was implemented by the Union government during the last two years. Further, the Union government at present is not considering any loan waiver scheme for farmers”.
The Centre’s position assumes significance even as it is headed for the general elections slated in May this year. It also comes against the backdrop of Congress-ruled states in Madhya Pradesh, Rajasthan and Chhattisgarh waiving off farm loans.
As per estimates, farm loan waiver to the tune of Rs 1.88 lakh crore has been announced since April 2017, with analysts predicting a total waiver of Rs 2.75-3 lakh crore by 2019 general election.
Aware of the pitfalls of the loan waiver on a massive scale for the nation’s economy, Prime Minister Narendra Modi had in recent times voiced his objections to such populist measures. He has also accused the Congress of misleading the farmers in the name of loan waiver schemes.
RBI governor Shaktikanta Das had on Monday also cautioned against farm loan waivers, saying that “generalised write-offs” distorted credit culture and states should weigh their fiscal space before announcing such a relief.
Indications are that the Centre is closely examining the Odisha Government’s Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme as an alternative to farm loan waiver to provide the much needed oxygen to the ailing agriculture sector and provide relief to the farmers ahead of the Parliamentary elections. The cash transfer scheme has already been announced by Telengana and West Bengal.
According to the Mint, the aggregate amount of farm debt waivers before the 2019 elections would be around 1.3% of India’s GDP.
So far, major states such as Uttar Pradesh (UP), Punjab and Maharashtra, Madhya Pradesh, Rajasthan and Chhattisgarh have announced large-scale farm debt waivers. The debt waiver packages of UP and Punjab were aimed to fulfil poll promises made by BJP and the Congress party, respectively, in these two states. UP’s debt waiver of Rs36,400 crore is equivalent to one-fourth of the total estimated farm debt in the state. Punjab’s debt waiver worth Rs10000 crore is equivalent to less than one-seventh of the total estimated farm debt in the state. Maharashtra’s farm debt waiver cover almost one-third of the state’s farm loans.
