Farmers are under heavy debt, but loan waivers only treat the symptom, not the disease afflicting India's farm sector
ON JUNE 21, Karnataka became the fourth state to waive off farm loans in a span of less than three months. In doing that, it joined Uttar Pradesh, Maharashtra and Punjab. Ever since the Bharatiya Janata Party government waived off ₹36,500 crore farm loan in Uttar Pradesh, keeping a promise it made before the Assembly elections held earlier this year, farmers across the country have demanded similar treatment. With Madhya Pradesh, Gujarat and Rajasthan scheduled for polls in 2017-18, the demand will only gain steam.
The Uttar Pradesh government’s decision on April 4 triggered a chain reaction. On June 11, the Devendra Fadnavis government in Maharashtra announced a waiver of ₹35,500 crore loan to benefit 3.4 million small and marginal farmers. The total outstanding agricultural loan in the state was around ₹62,776.8 crore. Punjab, where the Congress had promised waiver before polls, followed and announced a loan waiver of ₹10,000 crore on June 19. Karnataka, with a loan waiver of ₹8,165 crore, was the last one to make the announcement till the magazine went to print. The total debt in Punjab and Karnataka is estimated to be ₹70,000 crore and ₹52,000 crore respectively.
In Madhya Pradesh, where the situation is particularly volatile and six protesters have died in police firing on June 6, the government is silent on the ₹52,104-crore outstanding loan.
Among the states that have seen protests and are likely to waive off loans, Andhra Pradesh has already started raising money through taxation. Three years ago, the newly formed Telugu Desam Party government in Andhra Pradesh had waived off ₹24,000-crore farm loan. The Tamil Nadu farmers also undertook a month-long protest in Delhi this April to get their ₹5,780-crore loan waived off.
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