The centrepiece of the Union budget for 2008-09 presented by finance minister P. Chidambaram is unquestionably the waiver of agricultural loans to the tune of Rs 60,000 crore. All loans upto March 2007 and overdue up to December last year will be covered by June 2008. Three crore marginal farmers holding upto one hectare of land, and small farmers holding up to two hectares, will benefit to the tune of Rs 50,000 crore by the waiver. The one-time settlement for other farmers, in which the government will give a 25 per cent rebate on payment of outstanding loans, will cost another Rs 10,000 crore.
Coming as it does on the back of thousands of farmers’ suicides across the country, the write-off has been described as “revolutionary” by UPA president Sonia Gandhi. Prime Minister Manmohan Singh has called the loan waiver a “generous gesture“. But farmers’ groups, some of whom were rounded up by Congress lackeys to celebrate in front of Sonia’s residence, are not all enthused. They feel that the land-size criterion is too strict. Most of the farmers in worst-affect Vidarbha, where large packages announced by Singh have failed to stem the deaths, would actually miss out.
Questions: Is the move to write off farm loans a good move or a bad move? Is it really intended to help the farmers or is it intended to woo them in the next election? Will banks have to pick up the UPA’s tab or will the government impose a cess on non-farmers to raise funds? Will the write-off stop the suicide spurt or will it only end up in creating a very poor repayment culture among farmers? Has politics triumphed over economics? Or, given the general prosperity of the country, is it a small price–jai kisan and all? And above all, will such populism really swing votes in the direction of the UPA, or is the Indian farmer smart enough to see its motives?
Also read: Sheep, mutton, fish, Karnataka and Maharashtra
churumuri 
The real problem affecting indian agricultural sector is the low price for the farmer’s produce. Rich developed western nations give subsidy to the farmers and that helps them to sell their produce international market at a lesser rate than indian farmers.
Our govt gives higher amount for imported wheat while domestic farmers get a fraction of that price. This is discrimination of a worst kind.Our politicians say that rich exporters should be given subsidy when rupee rises by 10% against dollar but when farmers demand subsidy or a minimum support price for there produce they say that it is against free market economics and against the principle of economics.
What indian farmers need is not waiver of loans or any packages but minimum support price or a respectable price for that produce.In that way farmers can earn back there investment and pay back there loans themselves instead of depending on govt..
If agricultural crisis is allowed to grow and no solution is found then indian agricultural sector may crash in another 100 years and we have to imported food stuffs only,a huge downfall for a country where rice is workshipped as goddess and harvest festival is one of the major festival.. Now only lot of youth are migrating to cities unable to leave on farm income…
LikeLike
Many of the things he said in the budget will take a while to translate into fine print. If the farm loans that will be waived are actually those that are anyway being written off as bad debts it is okay. In that case the government will have to make it up for the banks which I don’t know is such a good thing. Also at this point in time we dont know where most of these loans are being waived. it is possible that they will be waived in places with high rate of farmer suicides(mostly states ruled by congress).
On the overall it is not a great move. The government should encourage farmers to repay and invest in helping small farmers adopt modern agriculture methods and get a better yield so that they are able to pay back loans.
LikeLike
Why not? I support it. I am a former farmer! Or still a farmer on record!
LikeLike
how many really take loans from the banks? isn’t the chakrabaDDi the heaviest axe? isn’t that why pawar and gang act the way they do, because their butter is on the other side of the bread?
LikeLike
TS you have hit the nail on the head! Most measures and schemes benefit the well to do and slightly well to do! The so- called poor farmers are often left out.
LikeLike
If I were a public sector bank chief, I would be quivering in my pants. If I were a private sector bank chief, I would be sending Chidambaram a thank-you note.
Look at the irony. The finance minister has almost issued a carte blanche to farmers, a licence if you will that you need not repay what you owe PSBs, now and in the future because a precedent has been set. And at the same time the government hands out a Padma Bhushan to a bank chief who has legitimised loan recollection at gunpoint.
At this rate, public sector banks will now not lend loans with the same vigour, unless ordered to at gunpoint. This will drive farmers to private sector banks where they will have to repay, give or take a few thousand suicides.
Certainly, the suicides of farmers is a grim thing, and something must be done to prevent that and to turn Indian agriculture into a “happening” scene. But is writing off all loans the answer? I think not. Will it help the UPA? Maybe not, but it will certainly help the Congress, if they are smart enough to drive home their pro-farmer “social concern”.
LikeLike
>>Will it help the UPA? Maybe not, but it will certainly help the Congress, if they are smart enough to drive home their pro-farmer “social concern”.
>>
This will definitely help the congress in the coming LS elections and other parties be damned. The rozgar yojana and the farmer loan write off together will swing a major chunk of rural votes in congresss’ favour.
LikeLike
Thank You PC. Long live Loan mela
LikeLike
This is socialism or communism at best. Our tribal nation will never rise out of poverty with such populist measures!
LikeLike
Loan waiver? Yes, I support it. If it saves a few farmers life that serves the purpose. For the disastrous economic policy we have had over the last 60 years in the name of socialism, this is the least we can do for the unfortunate farmers. This is the least congress can do for those who have been made to suffer in the name of communism and socialism; for not letting 70% of the population to migrate their professions; for keeping them alive on oxygen pumps; for showing hopes of ‘Gareebhi Hathao’ when she was the major reason for gareebhi; for turning a billion people into non productive lots with no jobs; for turning the whole of administration into license raj; for not providing a smallest of opportunity for hardworking people to come up in life, all in the name of socialism; for forcing poors of the country to suffer because people like Nehru believed in some ‘ism’ and so much for the ism to be proven right. Yes, we need to give the farmers a chance, not out of sympathy – out of shame. Because you can not see people commiting suicide for a mere loan of 10 thousand rupees.
But this can not be a permanent strategy, for the simple reason that this is not practical over long term. Govt should apologise for imposing ideologies which are outdated, proven to be failures all over the world. It should make genuine plans to displace the excessive crowd in agriculture to other sectors; give confidence to those farmers who still beleive that hardwork never fails. And don’t fail them.
Inspite of evidence everywhere, sad to see govt of India is still reluctant on privatisation and capitalism; be it for the sake of votes, be it for the fear of extinction of corruption.
LikeLike
Can the politicians be allowed to play with the public funds. During the last TN elections a promise was made to give free TV sets and Gas connections to all the poor from the public funds if MK is voted to power. Even after giving them a free gas connection they continue to get subsidised kerosene. Why? Now this new gimic by the centre in waiving the farmers loan. Whose money is it? What will happen to the fresh loans to the farmers. Will the banks give them. Who ever has repaid the loan is a fool and the defaulter is benefited. This is another form of corruption. Amadmi may feel that the IT slab is raised and the budget is good , but what happens to the taxes you pay? Prises of all essential commodities have gone up by over 60% in the last six months. Why not the gov. do some thing about this rather than wasting public funds.
Mamamohan and his friends should stop talking about reforms in future.
We want some tough Leader to save the Nation from these spineless people.
LikeLike
WRONG
LikeLike
What about personal loans taken from the pvt sector banks at very high rates of interest.Can someone convince PC to make an amendment at the time of passing the budget.Many Middle class indians will definitely benifit and vote for the CONG ress.
LikeLike
yardo duddu yellammana jathre. Remember poojari sala?
LikeLike
rahul gandhi resorting to grama vaastavya, now chidambaram taking a leaf out of kumaraswamy govt budget, it only vindicates jd s- bjp govt success story.
anti- jd s people should take note of this.
I CONGRATULATE P CHIDAMBARAM ON PRESENTING THE BEST BUDGET PRESENTED IN THE HISTORY OF INDEPENDENT INDIA.
LikeLike
dr Ramesh, Tax of Chicken feed is aso reduced
LikeLike
Mr.Chidambaram’s loan waiver is clearly done with an eye on the polls. But the question is whether it is right to waive the loans? Under normal circumstances it is not wise to do so but, given the number of suicides, it is imperative that the government gives a short-term relief. Also, this is an incentive not to pay the debt – which encourages genuine farmers to default. Of course, there are also arguments suggesting that the money could be utilized for improving agricultural infrastructure which benefits in the long run but an immediate relief is necessary at this point of time.
Also, this is actually a boon in disguise to the public sector banks. Normally, these loans are written off as NPAs and treated as loss. But now these banks will be getting money (atleast part of it) from the government to cover these losses.
At the end of it will the farmers benefit? Some of them might benefit, yes. But a large number of suicides are due to the debt owed to private money-lenders who are generally not benign. Thats the sad part – the government may have done something good – but it may not help much in reducing farmer suicides.
LikeLike
How about wave off credit card loans in India?
LikeLike
Loan waiver granted by the FM or its another version in Karnataka is certainly nothlpul to farmers in the long run. Majority of them gets loan from private financiers. Let our policy makers orders waiving of these loans! No one has the concern to agriicultural sector. Our Agriculture Minister has no plans for his ministry but has bountiful if it comes to BCCI. Waiving of loans from government banks encourages unscruplous ‘farmers’ to go for more and get waived. The Govt rather our politicians wants them tobe debt-trapped for ever. Let them make sweeping policies to boost this sector so that the business of farming becomes a booming industry. It needs guts and will power to do the same. Certainly not these once in five year, the so called people’s representatives
LikeLike
today’s deccan herald…
The Union Budget for 2008-09 proposes to make a special grant of Rs 100 crore to Mysore University to make it an “institution of excellence”.
Coming after the Rs 100-crore grant to the Indian Institute of Science, Bangalore, in the last budget, Finance Minister P Chidambaram’s new budget also proposes to make two other universities along with Mysore as institutions of excellence in the coming fiscal. For 2008-09, IISc has been given Rs 130 crore under Plan and Rs 91 crore under non-Plan outlay, making it a total of Rs 221 crore. Under bigger, externally aided projects, Karnataka’s municipal reforms project would get Rs 119 crore, watershed development project Rs 110 crore and panchayats’ strengthening project Rs 250 crore.
i would have preferred this money come from GoK. but thats politics.
what can UoM do? i hope they spend that money to fortify departments that are hardly in fashion but are nevertheless critical to mysore in particular and karnataka in general.
i think botany, zoology, geology, water studies, urban studies departments need to be fortified. last i heard MMC was is serious trouble. perhaps bio & nano tech. if they are going to spend money on kannada and history, then do it enrich not to regurgitate. Hire people like shankar bhat and not more of the p-number of theory regurgitators. encourage publishing.
a call for spending money on research & facilities itself is obvious, but my hope is that they will spend money on outreach and localization.
dissemination,whether within academia or to the general public itself, always helps. at the very cynical minimum a good ego boost aka positive feedback for the disseminator.
still remember going to UoM platinum jubilee fair. what i saw there lingered in my head for weeks.
perhaps it was my teachers but always loved the geology and physics department. not that i became good in these or anything, nevertheless got fired up alright. long after the fair was over, i would cycle around the departments. finally made a friend in the geology department, the doode did his PhD there and would tell us with awesome stories but the most influential people i met were an idealistic couple with a then fledgling careers in physics.
they should conduct those open to public fairs annually. afterall what is a university that does not seed dreams?
i think every single paisa spent would be worth it. perhaps they can have a stall in the dasara exhibition maybe even a float in the procession. somehow seed the idea, amongst unsuspecting kids and their parents that there is more to life than quoting texts and paraphrasing theories.
this could also charge the graduate students up. a sense of scope and purpose.
LikeLike
Is it just me, or do you also get the feeling that Chidambaram has completely stumped Sharad Pawar’s Indian Premier League with the farm loan write-off? I mean where is giving a few hundred crore to a few cricketers, and where is Rs 60,000 crore to four crore farmers?!
LikeLike
Instead of waiving off loans every 4 or 5 years (during election time that is) the govt should come up with schemes which will make our farmers less dependant on loans i.e provide them better access to market, eliminate middlemen etc. which will increase their profits.
LikeLike
Loan waiver is at best a band aid. We need some creative strategy to solve the rural poverty.
No one has talked about the continuing massive subsidy of more than Rs 50,000 crores to petrol and diesel users. This is not seen even in the footnote of the budget. To this we should add another Rs 16,000 crores to LPG users. Together they account for more than what is likely to be waived for farmers.
If we also apply Rajiv Gandhi Rule only 15 paise will go to the actual beneficiaries), out of Rs. 60000 crores, most of this waiver will be pocketed by the middlemen and politicians. Still it will help the congress and UPA.
LikeLike
the money could have been used more prudently……………the loan wavier is nothing but a politically motivate move…………..it is not going to change the life of crores of poor farmers…………..I guess my answer to ur question is—- WRONG—
LikeLike
FARMAR LOAN SUBSIDI POLICY IS VERY WRONG.REALY UTILIZE AND PAY
IN TIME GOVT.NOT GIVEN ANY SUBSIDI . GOVT.MAKE DIFFRENSSES THEM. FARMER LOAN DIFALTING PRACTICE IMPRVE AND HIS GROUTH STOP.
LikeLike
Sir I request you to kindly help us teacher class people to come out of our debts from Private finances which is killing us becaus eof more interest.
Kindly help us to avail loans upto 1`0lakhs and deduct it from the same bank where our salary is credited.Please issue an order to get loans from our own banks whre our salary is credited.Please save our lives. I have debt of 10 lakhs please help me to come out of this great trouble and save my life.
Thanking you
Jasmine
LikeLike