P. Chidambaram‘s waiver of farm loans in the Union budget has raised more questions than it has provided answers. Why did the government wait for four years before acting? Who will foot the Rs 60,000 crore bill? Will it really stave off suicides, especially when 60 per cent of all farm loans are from private moneylenders? Will it translate into votes for the United Progressive Alliance in the next elections, as Sonia and Rahul Gandhi seem to think? And so on.
But what the reactions to the write-off does is to expose how deep the divide is between urban, Incredible India and rural Atulya Bharat; between industrial and agricultural, pro-reforms and anti-reforms. Despite 17 years of liberalisation neither side has any room in its heart for the other. The demise of Nehruvian socialism, it seems, is seeing the Nehruvian middle ground dissolve before our eyes into an either-or, “My way or the highway” slugfest.
Former Procter & Gamble India head Gurcharan Das, with all his eggs in the LPG (liberalisation, privatisation, globalisation) basket, writes in The Sunday Times of India that to win an election, the UPA government doesn’t mind a whole nation becoming dishonest:
“Human society is based on trust. When an ordinary person takes a loan, he feels duty bound to repay it. He will even sell his family’s jewellery to fulfill his promise. This is because we learned as children from our mothers to keep promises. Tulsidas’ ideal, praan jaye par vachan na jaye was held up to us as a moral ideal. We admire Karna in the Mahabharata for not switching sides because he had given his word to Duryodhana. This loan waiver wounds that moral universe. It tells the farmer not to bother to repay his next loan, because, who knows, another party will be in power and it, too, will cancel his debts. What message does this send to the honest village woman who struggles every week to repay her micro-loan?”
At the other end of the spectrum is P. Sainath, the Magsaysay Award winning rural affairs editor of The Hindu. He writes of the irony of the Vidarbha farmers whose plight resulted in the waiver not being its beneficiaries, of the anomalies of the size criteria and land classification. But he uses the opportunity to twist a knife into the Doubting Dases.
“Is the waiver ‘unprecedented’? Each year, nationalised banks write off thousands of crores of rupees as bad debt. Mostly money owed by small numbers of rich businessmen. And theirs is not a ‘one-time waiver.’ It is a write-off that recurs every year. Between 2000-04, banks wrote off over Rs. 44,000 crore. Mostly, this favoured a tiny number of wealthy people. One ‘beneficiary’ was a Ketan Parekh group company that saw Rs 60 crore knocked off. However, those ‘waivers’ are done quietly. In 2004, last year of the NDA, such write-offs went up by 16 per cent. Such ‘waivers’ have not slowed down since 2004.
“And all this is apart from the annual Rs. 40,000 crore ‘giveaway’ to the rich, mainly corporate India. That has been the average in the budget every single year for over a decade. Then there are the straight handouts. No one knows how many thousands of crores are lost by handing out spectrum the way it’s being done. But we know it’s a staggering amount. Tot up the ‘tax holidays,’ exemptions and the rest of it and you’re looking at sums that make the ‘unprecedented’ one-time farm loan waiver look like loose change.”