Left on the Margins
In the headlong rush towards ‘development’, the Indian farmer seems to have fallen through the cracks
Despite being a surplus foodgrain country, India has not been able to rescue its farmers from the debt trap
See the figure below? 3,000,000,000,000. The number 3 followed by 12 zeroes. That is the burden the country will have to bear if all states waived farmer loans before the 2019 Lok Sabha polls. This is an estimate based on Merrill Lynch’s calculation that such waivers will cost India 2 per cent of its 2015 GDP ($2,089 billion). It was enough for the wealth management advisory to raise the first red flag, declaring that “farm loan waivers of up to 2 per cent of the GDP in the runup to the 2019 hustings pose fiscal/rate risk and impacts the credit culture”. The warning note came in the wake of the Uttar Pradesh government of Yogi Adityanath announcing in March that it was sanctioning farm loan waivers to the tune of Rs 36,359 crore, or 0.4 per cent of the state’s Rs 12.37 lakh crore GDP. Inevitably, this was followed by demands for similar concessions to farmers in Maharashtra, Punjab, Haryana, Tamil Nadu, Telangana and Andhra Pradesh.