Loan politics

Farm debt waivers have serious adverse consequences

In his Budget speech just three months ago, Maharashtra Finance Minister Sudhir Mungantiwar said while he was aware of the deep indebtedness of farmers in the state, a loan waiver would be an ill-advised step as it would have an impact on investment in the agriculture sector and would provide no assurance that the farmer would permanently come out of the debt trap. However, an 11-day farmer strike finally broke the government’s resolve, and the state has announced a sweeping Rs 30,500-crore debt waiver to small and marginal farmers with immediate effect. Reports suggest that the government has also agreed