A Half-hearted Waive

A cash-strapped gov­ern­ment finds ways to prune the list of loan-waiver ben­e­fi­cia­ries by re-cod­ing el­i­gi­bil­ity norms

India Today - - STATES - By Rahul Noronha

The elec­toral prom­ise of farm loan waivers was a ma­jor fac­tor in the Congress win­ning Mad­hya Pradesh in De­cem­ber 2018. The party man­i­festo said all farm­ers’ loans of up to Rs 2 lakh would be writ­ten off. Then Congress pres­i­dent Rahul Gandhi said the party would do so within 10 days of as­sum­ing power. And Chief Min­is­ter Ka­mal Nath did is­sue waiver or­ders the very day he took charge.

Now, how­ever, sources in the state gov­ern­ment main­tain that farm­ers whose loans ex­ceed Rs 2 lakh will not be cov­ered un­der the scheme as the prom­ise was to waive loans only up to that sum. This will be a set­back to farm­ers who thought the gov­ern­ment would waive Rs 2 lakh off all loans and they would have to re­pay the amount in ex­cess of that fig­ure. The lat­est ‘clar­i­fi­ca­tion’ will ex­clude some 500,000 farm­ers from the ben­e­fi­ciary list.

When news of this de­vel­op­ment broke out, Congress spokesper­sons de­nied it at first. But the next day, a let­ter

from the chief min­is­ter to the farm­ers ap­peared in the me­dia. The let­ter asked farm­ers to con­tinue re­pay­ing their loans.

Al­ready, while an­nounc­ing the waiver in De­cem­ber, the state gov­ern­ment had in­tro­duced a clause whereby in­cometax pay­ers, Class I, II and III gov­ern­ment em­ploy­ees, sit­ting and former MLAs and MPs and a host of former and present po­lit­i­cal of­fice-hold­ers would not be el­i­gi­ble for the waiver.

This ex­cluded about 700,000 farm­ers, re­duc­ing the el­i­gi­bil­ity list from 5.5 mil­lion farmer ben­e­fi­cia­ries to 4.8 mil­lion.

The state gov­ern­ment first waived loans of farm­ers who had bor­rowed less than Rs 50,000, be­sides those Rs 2 lakh loans that had be­come non-per­form­ing as­sets due to re­pay­ment de­faults. This cost the ex­che­quer Rs 7,000 crore and ben­e­fit­ted nearly 2 mil­lion farm­ers. Next to be waived were cur­rent loans of up to Rs 1 lakh, cov­er­ing about 600,000 farm­ers. The re­main­ing farm­ers, mostly those who had bor­rowed from com­mer­cial banks, would make up the third lot. Loans from co­op­er­a­tive and ru­ral banks were to be writ­ten off on pri­or­ity.

In an at­tempt to jus­tify the move, a se­nior state gov­ern­ment of­fi­cial said, on con­di­tion of anonymity: “The state gov­ern­ment in­her­ited empty cof­fers and be­sides, farm­ers whose loans ex­ceed Rs 2 lakh are well-to-do any­way.”

The state’s fi­nan­cial con­di­tion is in­deed pre­car­i­ous. It had in­her­ited a Rs 34,000 crore deficit from its pre­de­ces­sor gov­ern­ment. Be­sides, it has to hon­our com­mit­ments such as the bonus on wheat pro­cure­ment and the dif­fer­en­tial amounts to be paid un­der the state’s crop price-pro­tec­tion Bha­van­tar scheme.

Mean­while, farm­ers’ or­gan­i­sa­tions in the state are up­set at the state gov­ern­ment’s at­tempts to cur­tail the ben­e­fi­ciary list. “What the gov­ern­ment has done con­sti­tutes a breach of trust,” says Anil Yadav of the Bharatiya Kisan Union. “A lot of farm­ers with loans above Rs 2 lakh have not re­paid loans as­sum­ing they would be writ­ten off. They are be­ing charged in­ter­est on it. We are think­ing of go­ing to the high court against the de­ci­sion.”

“Rahul Gandhi had promised farm loans would be waived within 10 days or else the CM would be changed. By that logic, 27 CMs should have been changed till date,” says former CM Shivraj Singh Chouhan. In re­sponse, state Congress me­dia co­or­di­na­tor Naren­dra Saluja re­torted, “The BJP had be­fore the 2008 as­sem­bly elec­tion promised to waive loans up to Rs 50,000 and later re­neged on this com­mit­ment. More than 25,000 farm­ers com­mit­ted sui­cide in the 15 years of BJP rule. The party has no lo­cus standi on the mat­ter.” The Congress even waved a doc­u­ment that showed its gov­ern­ment had waived Chouhan’s brother’s loan.


LOAN RIDER CM Ka­mal Nath hands over a waiver cheque to a farmer in Bhopal

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