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"Farm loan waiver is no solution for Indian agriculture."
consider points are as follows:
• a big challenge for the Maharashtra Government
• The government's spending power decreases
• will impact credit discipline
• farmer suicide
• such schemes reap electoral benefits
• increases the deficit
farmers get encouraged to default.
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Answer:
Last week, the Indian National Congress at the Maharashtra assembly submitted a breach of privilege notice against State Bank of India chairman Arundhati Bhattacharya for “insulting farmers and the House" by her remarks on farm loan waiver. The leader of the opposition in the state assembly, Radhakrishna Vikhe Patil, was upset with Bhattacharya because she “did not apologise for her remarks despite the Congress’s demand".
The Congress and the Nationalist Congress Party have been demanding a loan waiver for around 3.1 million farmers in Maharashtra who owe Rs30,500 crore to the banking system. “Bhattacharya is not a policymaker and she cannot take a decision regarding loan waivers to the farmers. She had no right to make such comments," and her remarks were “violation of the rights of the legislature which make laws," Vikhe Patil said.
What did Bhattacharya say? The boss of India’s largest lender early last week said farm loan waivers disrupt “credit discipline" among borrowers as they expect future loans to be waived as well. Bhattacharya feels that while it is important for banks to make credit available to the farmers, maintaining credit discipline is equally important. “For the time being, we will get our money back as the government will pay for it. But the farmers will keep waiting for the next elections for the next round of waiver," she said.
The Congress and the Nationalist Congress Party have been demanding a loan waiver for around 3.1 million farmers in Maharashtra who owe Rs30,500 crore to the banking system. “Bhattacharya is not a policymaker and she cannot take a decision regarding loan waivers to the farmers. She had no right to make such comments," and her remarks were “violation of the rights of the legislature which make laws," Vikhe Patil said.
What did Bhattacharya say? The boss of India’s largest lender early last week said farm loan waivers disrupt “credit discipline" among borrowers as they expect future loans to be waived as well. Bhattacharya feels that while it is important for banks to make credit available to the farmers, maintaining credit discipline is equally important. “For the time being, we will get our money back as the government will pay for it. But the farmers will keep waiting for the next elections for the next round of waiver," she said.