There is a need to address agriculture sector distress…but economic principle-wise, farm loan waiver is not an effective means to address farm distress, said ADB India country director Kenichi Yokoyama.
Addressing the issue of farm loan waiver, Asian Development Bank (ADB) India country director Kenichi Yokoyama said that farm loan waiver is not an effective means to address farm distress, the Indian Express reported.
“There is a need to address agriculture sector distress…but economic principle-wise, farm loan waiver is not an effective means to address farm distress,” he told reporters Friday.
Madhya Pradesh, Rajasthan, Chhattisgarh and Uttar Pradesh were among the states that recently announced farms loan waivers.
Yokoyama said that write-off these loans were against economic principles, PTI reported. He also said that direct transfer of funds to targeted beneficiaries would cut down leakages.
He said that analysis is required on how universal basic income (UBI) scheme can be launched by the government in the most efficient manner.
Yokoyama further said that he has no doubt about the government meeting the target on fiscal deficit. The government has targeted meeting fiscal deficit at 3.3% of the GDP in the current fiscal, lower than 3.5% in FY18.
“I think a clear framework is there and mandate given under the Fiscal Responsibility and Budget Management Act. We don’t have any doubt over it,” he said.
Last month, Finance Minister Arun Jaitley had expressed confidence in achieving the target.
ADB is looking to increase its lending commitment to India from $3.03 billion in 2018 to $4 billion annually. The bank committed the highest ever annual lending to India in 2018 for 19 projects in transport, urban, skills, agriculture and natural resources, energy and finance sectors, Yokoyama told reporters Friday.
He said that ADB’s commitment included $557 million in loans for the private sector even as the funding ahead will be based on the readiness of the projects.
The bank committed $315 million to Himachal Pradesh, Odisha, and Madhya Pradesh last year for improvement in vocational education institutions and programs to provide job-ready skills training to youth.
ADB’s India portfolio includes 82 ongoing projects worth $13.7 billion across 25 states.