Left on the Mar­gins

In the head­long rush to­wards ‘de­vel­op­ment’, the In­dian farmer seems to have fallen through the cracks

India Today - - INSIDE - BY AJIT KU­MAR JHA

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.

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