States must refrain from cowboy banking
Apropos of the report “Farm loan waiver demand escalates…” (FE, June 14), addressing an election rally in the parched Jhajjar district of Haryana in 2004, former prime minister Atal Bihari Vajpayee promised to usher in the second green revolution in the country. Referring to the late Devi Lal’s loan waiver scheme, he said he “did not believe in such populist measures” as they were virtual invitations to default. The solution to farmers’ woes, he argued, lay in making their profession lucrative. Therefore, he promised to bring down interest rate on farming loans gradually to 5% and ensure ample supply of water to every farmer by fully implementing his government’s scheme for linking all major rivers in the country. Such deviation from political expediency was echoed by RBI Governor Urjit Patel who termed farm loan waivers a “moral hazard” and sought consensus among all political parties in India to desist from announcing them. It is, therefore, surprising why the Modi government is encouraging recidivist tendencies among its state governments instead of encouraging state investment in agricultural backend infrastructure. It is time the government came up with a robust framework to mitigate agricultural distress and rural indebtedness and prevented its state chief ministers from indulging in “cowboy banking”.
— Shreyans Jain, Delhi
Loan waiver hazard
This refers to the article “Farmer riots amidst rising prosperity” (FE, June 10). Loan waiver is a retrograde step. In India, where annual agriculture waste is about `96,000 crore, farm loan waiver is just a poll sop. The real crisis is that he or she is not in control of the trade and is exploited by the traders’ cartel.
— Vinod C Dixit, Ahmedabad