Jaitley rules out farm loan waivers by Centre: Mainstream farm sector
Setback for Yogi Adityanath? Jaitley rules out farm loan waivers by Centre: He said the Centre will not adopt a selective approach by helping one state and not the others...
Mainstream farm sector
This refers to the report “Centre rules out farm loan waivers” (Business Standard, March 24). After the assets with religious and non-government institutions, farm sector resources are the worst managed national assets awaiting mainstreaming in India. Agriculture not being in the central list, the funds in the farm sector largely being managed by cooperatives which are in the ‘concurrent list’ and farm workers managed by big affluent farmers being a strong constituent of ‘Vote Bank’ and fund-raisers for political parties have contributed to perennial neglect of the sector for being brought under normal regulatory/legislative controls of government.
The above situation has made regulatory and supervisory bodies like Reserve Bank of India and NABARD to remain mere spectators when governments and financial institutions fall in line with the wishes of political leadership at various levels.
The advisories like the one from Centre against farm loan waivers and taking a lenient view of such waivers by state governments or going slow on providing support to financial sector in recovery of farm loans need to be seen in this broader context. Election Manifestoes are not vetted for the legal enforceability or resources linkages relating to the promises included. But when a party comes to power, the popular promises are taken up for implementation without weighing the pros and cons or allowing the legislatures to deliberate on the basic issue ‘who will foot the bill?”
At this stage, Centre should consider consultations with states on measures to professionalize and mainstream farm sector to make the sector participate in the economic development of the country effectively. Changes in approach may be necessary on issues like:
(a) Tax on agricultural income
(b) Modernizing methods of cultivation
(c) Linking farming to a national ‘food budget’ export potential and cheaper imports.
(d) Re-skilling of workforce in farm sector and
(e) Optimum utilization of farm lands.
(f) Substitution of ‘waivers’ by subsidies which will incentivize further involvement of farmers in increasing production. Multiple subsidies like ‘interest subsidy’ for prompt repayment from various sources, which may not result in increased farm productivity, but will transfer the burden to the taxpayer should be avoided.
In all the above efforts, financial institutions and banks should be given their rightful role.
M G Warrier, Mumbai