In budget 2008, the UPA government has announced farm waiver scheme worth Rs. 72,000 crore. According to the finance minister Mr. P. Chidambaram India’s one trillion economy can afford to bear this burden of farm loan waiver. In the statement released after the budget session, FM clarified that there was a compelling need to go for a one-time measure to write off loans of smallest and poorest farmers of India.
The scheme waived institutional farm loan worth Rs.71,680 crore meant for almost 4.5 crore small and marginal farmers with less than 2 hectares(ha) of land. The waiver was valid for defaulters unable to pay off loans taken after March 31, 1997. The cut off date is till March 2008 and the scheme is extended to fisher folk, dairy and poultry farmers. It has been extended that over 40 million indebted Indian farmers have begun to get some financial relief as the massive loan waiver scheme.
But, the question here is that the government’s populist measure to win over farmers’ has achieved the aim for what it was meant? The answer seems to be more on the side of NO.
Relief measures are not having desired effects as we can still have reports of suicides even after implementation of the debt relief package. In recent times the futility of measures like interest waiver and loan repayment rescheduling has been manifested in Vidarbha and other areas affected by farmers’ suicides. The number increased to 1414 during 2006-07.
It has helped farmers those have taken loans from banks only. It doesn’t address the bigger issue of farmers, indebtness to moneylenders. The farmers have taken money from local money lenders to pay back their loans before due date. These money lenders charge usurious interest rates which may be as high as 30% as compared to government’s 3% only. The grip of moneylenders is as it is on many farmers. This is largely because private money lenders who supplement the loans of even those farmers are covered under the intuitional credit system have continued to harass them for the settlement of their dues.
Moreover, farmers those were honest enough to pay their loans back even by going out of way before the scheme was announced ,are regretting. Some even borrowed money for non –agricultural purposes like marriage etc, are enjoying the waiver.
In addition to all these farmers are facing certain other difficulties as well. The government announced that the list of farmers eligible for waiver was supposed to be put outside the banks by 30th June. But, various banks haven’t put up any list as yet. When farmers approached them, banks couldn’t give any concrete response. Adding to the problems, those who have displayed the list, have made it in English, with misspelled names, more than one same name, wrong account number etc.
All these glitches are giving touts, those who are helping farmers, to do bank work, an opportunity to make money from illiterate farmers. Banks are not doing their work in time and in organized way. Redressal officers are missing from the banks making the situation even worse.
The need of the hour is agricultural renewal altogether along with productivity improvement. Farmers need source of income. This is possible only by having structural changes, which not only regulate agriculture but also pay right remuneration for their efforts they put in fields. The subsidies given for drip irrigation and fertilizers are not reaching farmers but going in the hands of middleman and concerned companies. So policies and legislations whatever are, should benefit the farmers, who need it most
The scheme waived institutional farm loan worth Rs.71,680 crore meant for almost 4.5 crore small and marginal farmers with less than 2 hectares(ha) of land. The waiver was valid for defaulters unable to pay off loans taken after March 31, 1997. The cut off date is till March 2008 and the scheme is extended to fisher folk, dairy and poultry farmers. It has been extended that over 40 million indebted Indian farmers have begun to get some financial relief as the massive loan waiver scheme.
But, the question here is that the government’s populist measure to win over farmers’ has achieved the aim for what it was meant? The answer seems to be more on the side of NO.
Relief measures are not having desired effects as we can still have reports of suicides even after implementation of the debt relief package. In recent times the futility of measures like interest waiver and loan repayment rescheduling has been manifested in Vidarbha and other areas affected by farmers’ suicides. The number increased to 1414 during 2006-07.
It has helped farmers those have taken loans from banks only. It doesn’t address the bigger issue of farmers, indebtness to moneylenders. The farmers have taken money from local money lenders to pay back their loans before due date. These money lenders charge usurious interest rates which may be as high as 30% as compared to government’s 3% only. The grip of moneylenders is as it is on many farmers. This is largely because private money lenders who supplement the loans of even those farmers are covered under the intuitional credit system have continued to harass them for the settlement of their dues.
Moreover, farmers those were honest enough to pay their loans back even by going out of way before the scheme was announced ,are regretting. Some even borrowed money for non –agricultural purposes like marriage etc, are enjoying the waiver.
In addition to all these farmers are facing certain other difficulties as well. The government announced that the list of farmers eligible for waiver was supposed to be put outside the banks by 30th June. But, various banks haven’t put up any list as yet. When farmers approached them, banks couldn’t give any concrete response. Adding to the problems, those who have displayed the list, have made it in English, with misspelled names, more than one same name, wrong account number etc.
All these glitches are giving touts, those who are helping farmers, to do bank work, an opportunity to make money from illiterate farmers. Banks are not doing their work in time and in organized way. Redressal officers are missing from the banks making the situation even worse.
The need of the hour is agricultural renewal altogether along with productivity improvement. Farmers need source of income. This is possible only by having structural changes, which not only regulate agriculture but also pay right remuneration for their efforts they put in fields. The subsidies given for drip irrigation and fertilizers are not reaching farmers but going in the hands of middleman and concerned companies. So policies and legislations whatever are, should benefit the farmers, who need it most
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