Dear Editor,
Reserve Bank of India Governor Raghuram Rajan’s recent anguish over debt-waivers’ constraining credit flow to farmers, is understandable. Be it during the UPA Government in 2008 or by Chief Ministers
K Chandrashekar Rao and N Chandrababu Naidu in 2014, agricultural debt-waiver and relief schemes have always been used as means to win elections, in defiance of the practical problems and economic impact they hold. Studies by the Public Accounts Committee, the Comptroller and Auditor-General and various other agencies have revealed that in many cases, deserving farmers have been overlooked.
It is a fact that waiver of agricultural loans and grant of indiscriminate subsidies, have not benefitted the farmers. In fact, they caused them untold misery and resulted in an agrarian crisis. This is clear from the farmer suicides in Telangana despite a waiver of such loans and the availability of various subsidies. More than money, farmers need assistance in the form of assured water supply, uninterrupted power, improved seeds, modern farming techniques, remunerative prices for the produce and a boost to their self-confidence.
From 1989, the rate of credit flow to farmers has declined. More than 50 per cent of agricultural credit goes to urban areas in Maharashtra. How do we regulate this credit flow? Further, there are questions about the impact of loan waivers and the issue of farmer suicides. There needs to be a comprehensive study of the issue, followed by urgent reforms.
Abhijit Roy
Via email