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.”
Also read: CHURUMURI POLL: Farm loan waiver: right or wrong?
churumuri 
It’s all poll politics. All the Congress needs is votes. It thinks that it can get by doing this.
Poor Congress!
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http://www.economist.com/opinion/displaystory.cfm?story_id=10808493
suggests:
“One indication of officials’ resistance to change is Mr Chidambaram’s new proposal to erase the debts of 30m small farmers. This loan waiver may be costly (over 1% of GDP) and crude, but it has one big virtue: it transfers money to relatively poor people at the stroke of a pen, bypassing the cumbersome machinery of the state.”
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P. Sainath “uses the opportunity to twist a knife into the Doubting Dases.” Beautiful prose!
But Sainath’s argument is ridiculous — it represents a form of “two-wrongs-make-a-right” fallacy.
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how do you read that line – ‘twist a knife into the Doubting Dases’?
what is the context? and why the two capital Ds?
first few of sainath’s articles i read with great amazement. then it started becoming apparent that he is not about an honest understanding but about making a point. and make the point he will using all the tricks in the book and beyond it. though if there was any one from whom i would like to be lectured on theories it is him.
business and enterprise is not a bad thing. its not a sin. its not evil.
it does not mean there are no excesses in it. just as there is no guarantee that communism and socialism have no excesses.
they all need regulation (not controllers and licence-wallas ) and best country dogs for kaavalu(not imported ones, not even country dogs with a taste for imported purina dogfeed).
US’s market would not have had the moral standing for its politicians to sweat talk about if it were not for trade unions. and yet it is only US’s capitalists roots that ensure that your average worker enjoys much better benefits than your average worker in china, erstwhile ussr and even the modern day airope.
middle ground of nehruvian socialism — hahaha…
what about the stiff collar/straight coat aka my way or the highway of the ‘nehruvian’ socialists?
middle ground is just so much pheNi(sweat talk) for mediocracy, status quo and peddling of european theories – theories which conveniently, for the then rulers, made entire masses inferior and now makes an even larger mass problematic(again conveniently).
yeah sure, it has given entire legions of middle ground regurgitators like guha careers, but has not meant one single thing to anybody else.
ha, lest i forget, these regurgitators have also spawned a battalion of lingerie salesmen in the country, some of whom you can find here on churumuri as well. those interested can contact them, yards and yards of fine choNNa, chokka & cheddi they have. you could be wearing a lakshmeshwara grade panche, and plead that what you wear is choNNa they will still sell you a cheddi – such experts they are.
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Sainath, the maroon he is, being from the BA stream, and naturally innumerate or lacking any economic understanding whatsoever is simply talking gibberish. All these tax sops, tax holidays, tax cuts – although they are different we will go with Sainath sub-100 IQ and club these things – are handed out to productive sectors of the economy, to people and companies that create wealth, earn a salary, employ people, and pay taxes. It is one thing to hand out tax sops, and an entirely different foolish thing to write off loans on this scale indiscriminately. There is a difference Sainath you pinheaded impala. With sub-normal land holdings, a totally mismanaged distribution sector with non-performing behemoths like FCI (all of which get along famously with Sainath) the problems lie elsewhere. Sainath as usual doesn’t get the idea.
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Kaangeya!
Super post! Enjoyed it immensely!!
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The Economist, why do we in India ever swoon over this rag? The bilge dished out by its ignorant editors would put to shame the worst of standard essays you could find in our exam guides. Such gibberish. it transfers money to relatively poor people at the stroke of a pen, bypassing the cumbersome machinery of the state.” No this boondoggle doesn’t xfer any money to the “humble farmer”. It simply underwrites the banks that lent the money, many of whom have all but written off these amounts. If and when – and providence forbid – a bank looks like failing the incompetent triplet SG, MMS, PC and their dim bulb RG will step in and make good the losses. Thankfully we have more intelligence than that Economist!
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