Loan Waiver: It Pays To Be Farmer In Punjab
If, we believe on Arvind Subramanian’s (economic advisor to PM) statement in which he said “it simply does not pay to be the farmer in India”, then we must look at Punjab Chief Minister’s strange decision of farm loan waiver of Rs 2 Lakh.
Farmers with land holding up to 5 acres will enjoy the loan waiver, along with uniform loan waiver of the similar amount for other marginal farmers. According to Punjab government, it will benefit 10.25 lakh farmers which include those 8.75 lakh farmers, who own 5 acres and fewer landholdings.
Classification of land holdings in Punjab (as per last agriculture census) will clear doubts of, who will be the beneficiaries of this loan waiver?
While Punjab government is not willing to give the specific reason for this decision, it’s doubtful how Punjab government will identify the farmers, if landholdings are the basis of loan waivers. Roshan Singh a farmer from Fatehgarh Sahib (a major paddy growing area of Punjab) with small land holding said: “I have heard about the loan waivers but I know the influential farmers with large landholdings will find ways to misguide the government and take away benefits that rightfully belong to us”.
In light of Reserve Bank of India’s reaction to farm loan waiver as the immoral practice, now the rural bank of India NABARD has joined the RBI’s line and termed the loan waivers as the immoral practice. Bankers are terming it as a measure that will put a heavy pressure on exchequers’ pocket. But, in a race of appeasement, everything is fare, said an agrarian economist on condition of anonymity.
T Haque Committee
Punjab CM had termed it as the outcome of the report from a noted economist T Haque. Haque had chaired the committee constituted under NITI Ayog to prepare a model agriculture land leasing act. T Haque committee submitted its report to NITI Ayog on March 31 last year and recommended points like review existing agriculture tenancy laws of states, examine distinctive features of the land system, suggest appropriate amendments to legalise-liberalise land leasing and prepare a moral agriculture land leasing act.
A former rural banking expert from Indian Society of Agriculture Economics has told BW Businessworld “This farmers’ debt waiver can lead to affect almost 1.8 to 2 per cent of the entire GDP of nation”. It’s a practice leading to a bad culture, and farmers’ with large land holdings will definitely take away the large chunk of free-bee by state governments.
Why benefiting Suicidal Tendency
Punjab had witnessed big promises of corruption free governance and farm loan waivers during pre-electoral rallies by the Congress party. In a recent decision, Amrinder Singh had also assured that compensation of Rs 3 Lakh will be raised up-to Rs 5 Lakh for the families of diseased farmers’ who had committed suicide.
Meanwhile, during current farmers’ agitation in the nation, at least two Punjab farmers had also committed suicide, which might have played a key role to pressurise a newly elected Amrinder Singh government acting extraordinarily. Some political pundits have also termed it as pressure tactics by Congress to pose itself as more farmer friendly party. An expert from Punjab Agricultural University has told BW Businessworld that with all my respect to farmers who committed suicide, “it’s not good to increase benefits for committing suicide as it may lead few of the drug addicted farmers to develop the tendency of committing suicide and government has to succumb to pressure to give grants”. Punjab, a state once known as the agriculture leader of the nation is identified for its wheat, paddy, cotton, sugarcane, potato, oil seed, maize and barley productions.
