The falling agriculture output surely would impact the growth and affect other economic activities. As per the government data, the all-India average monthly income of agricultural households during the crop year July 2012-June 2013 was estimated at Rs 6,426. Prime Minister Modi’s poll campaign announcement that the Centre would bear the cost of the farm loan waiver in Uttar Pradesh, which would be among the immediate decisions the new BJP government would take, resonated in Parliament as opposition MPs demanded a similar lifeline for farmers across the country. Responding to the discussion in the Lok Sabha, Agriculture Minister Radha Mohan Singh only reiterated what Modi had said and the BJP’s UP manifesto had promised. The Finance Ministry, the RBI and banks are opposed to such concessions which, as the SBI chief has put it, tend to “disrupt credit discipline among borrowers”. The government stand in Parliament has dimmed chances of a nationwide loan write-off. The Centre’s partisan action of rewarding UP farmers for electing a BJP government is bound to invite a backlash and lead to heart-burns in left-out states, particularly Maharashtra, Karnataka, Tamil Nadu, Gujarat and Punjab, where agrarian distress has driven a significant number of farmers to suicide. This may create problems for Capt Amarinder Singh in Punjab as he too had made a similar promise. Last year, Tamil Nadu waived Rs 124.45 crore of farmer loans. Given Punjab’s stressed finances, the Captain will have a difficult time in keeping his promise. If sectoral slowdown or sickness can be a ground for writing off large industrial loans, the persisting crisis in agriculture cannot be overlooked. A handful of big borrowers have created a mountain of bad loans for banks, while many farmers kill themselves over ridiculously small amounts. Loan waivers, however, cannot match, or replace, efforts for sustainable growth, which requires higher agricultural spending and productivity. The road map, including MSPs, has to be on the lines suggested by the Swaminathan Commission.
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© 2016 State Times Daily Newspaper