Whats the rationale for Farmer Loan Waiver

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Asalu evadi thought idhi???

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How will farm loan waivers impact the Indian economy?

Farm loan waivers will strain the finances of states, and harm both farmers and banks over the long run.

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In its policy statement released last week, the monetary policy committee (MPC) of the Reserve Bank of India (RBI) pointed out that the implementation of farm loan waivers across states could hurt the finances of states and make them throw good money after bad, and stoke inflation. 

How much of an impact will the waivers have on the Indian economy?

A Mint analysis suggests that the cumulative impact of farm loan waivers is likely to be lower than that of the power-restructuring package, Ujwal Discom Assurance Yojana (UDAY), unless they are extended to all Indian states. However, the debt waiver packages, even if limited to a few states, will likely prove to be counter-productive and offer little gains to farmers over the long run.

So far, three major states—Uttar Pradesh (UP), Punjab and Maharashtra—have announced large-scale farm debt waivers. The debt waiver packages of UP and Punjab were aimed to fulfil poll promises made by the Bharatiya Janata Party (BJP) and the Congress party, respectively, in these two states. The cumulative debt relief announced by the three states amounts to around Rs77,000 crore or 0.5% of India’s 2016-17 GDP.

UP’s debt waiver of Rs36,400 crore is equivalent to one-fourth of the total estimated farm debt in the state. Punjab’s debt waiver worth Rs10000 crore is  equivalent to less than one-seventh of the total estimated farm debt in the state. Maharashtra’s farm debt waiver appears slightly more generous as it appears to cover almost one-third of the state’s farm loans.

If poll-bound states—including Gujarat, Karnataka, Rajasthan and Madhya Pradesh— too announce farm debt waivers and extend it to one-third of farm loans in their respective states, then the aggregate amount of farm debt waivers before the 2019 elections would balloon to Rs2 trillion, or 1.3% of India’s GDP.

 

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AP

Telangana

Punjab

Maharastra

Rajasthan

Gujarath

Madhya Pradesh

Karnataka

Uttar Pradesh

 

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Asalu Loan ivvadam endhuku Waive Cheyyadam endhuku...daaniki LOAN ani peru endhuku pettali....free ga money  distribute chestham anochhu ga...

 

Farmer Loan waiver is nothing but a regulated form of note for vote.