Sunday, March 02, 2008

Debt of gratitude

P Chidambaram has announced a waiver of farmer’s debt amounting to Rs. 60,000 crores. That is $15bn or 7.6bn pounds.

These are farmers who have under 2 hectares of farm land and have taken a loan from a government bank.

This, according to Mohan Manidwar of Farmers Agitation Group, which highlights the large number of impoverished farmers committing suicide, will exclude most farmers in the Vidarbha region of central India.

Also, close to 80 per cent farm loans are taken from private moneylenders and not banks.

While the FM has not spelt out where this money will be coming from, this loan waiver is welcome relief to as many as 4 crore who will benefit from what Chidarambaram calls “an unorthodox response.

However, one question remains: why did it take so long for the Government of India to redeem this “debt of gratitude”? Farmer suicides have been more or less a constant fixture since 1997.

Maybe I am being cynical, but I keep wondering if this one time loan waiver will be the solution or will it at best bring temporary, much needed relief to many.

Read here and here.


sankarshan said...

In some sort of a twisted play, the rates of interest for "micro-loans" from the established private banks who operate in this sector is nearly twice compared to what normal folks pay on car or home loans. What would be important is to ensure that the relief/waiver actually trickles down and doesn't in a warped way get creamed off in the middle.

Roop Rai said...

It's a good start though, innit?!

Sukanya M said...

The least we can do is hope Roop. And ofcourse you will last much longer in blogdom (referring to your other comment on a diff post of mine)... hope you enjoy it as much as I have!

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