Rahul Gandhi did not miss the political opportunity to make his presence visible in Mandsaur in Madhya Pradesh where at least five farmers were shot dead during protests in recent days. Gandhi did what any opposition leader would have done at such a juncture, pitch as the voice of the victims and speak on behalf of them to the ruling government. Before he was detained and denied permission to visit the riot area, Gandhi said, “Modi could waive loans worth Rs 1.50 lakh crore of the richest people of India, but can't pay heed to the plight of farmers. He can only give bullets to them."
What happened in Madhya Pradesh was indeed unfortunate. Both the central government and the state government failed to engage with the farmer early and in a constructive manner, instead let the situation worsen. No amount of sops or compensation can replace the lives lost. Gandhi, as a member of the opposition, has every right to join in the sorrow of the bereaved and speak for them to bring justice. The only problem is that the premise of Gandhi’s argument in favour of a farm loan waiver, while defending the farmer in Madhya Pradesh, is fundamentally flawed and will only worsen the situation from this point.
It’s true that there has been large-scale write-offs of corporate loans in the last four years, to the tune of Rs 1.7 lakh crore if one takes a rough cumulative figure. These include loans given to some wealthy, well-known figures in India’s corporate world. Many such write-offs are subject to disputes with the critics raising questions on whether these cases were genuine to warrant a write-off or not. But, one mistake can’t be an excuse to commit another. When Gandhi cites the corporate write-offs as a reason to do the same with farmer loans -— a demand he has raised during the Uttar Pradesh poll campaign — he is turning even the honest borrower into a potential loan defaulter.
Gandhi must have done some homework and looked at the history of farm loan waivers. Empirical evidence from the 2008 UPA-sponsored Rs 70,000 crore farm loan waiver and similar schemes show that loan waivers have never really helped the farmer. In fact, it has destroyed the credit culture of an entire geography for a prolonged period and has damaged the health of banks and state exchequers.
In fact, Gandhi should know that what has triggered a series of protests across major agrarian states like Maharashtra and Madhya Pradesh was the Uttar Pradesh loan waiver announced by the Yogi Adityanath government following a promise by Prime Minister Narendra Modi during the Uttar Pradesh election campaign. It’s not only Modi, Gandhi too has played the same card to win the hearts of Uttar Pradesh farmers. During the days of his spirited campaign, Gandhi had said he would waive loans of all farmers in Uttar Pradesh within 10 days of coming to power. It is another thing that Gandhi had to face a humiliating defeat to the Modi-led BJP in the Uttar Pradesh elections. But, had Congress won the elections, Gandhi too would have followed the loan waiver route to appease the farmer and similar demands would have arisen from farmers in other states as well, as is the case today.
Loan waivers only offer a temporary reprieve to the farmer. Unless the fundamental reasons that have caused his current plight do not change, he will require several rounds of loan waivers after every failed crop season. Responsible politicians, who are serious about farmer-welfare, should ideally make the farmer aware about the perils of loan waivers and think of long-term solutions using technology to improve farm infrastructure and free the farmer from the grip of greedy middlemen.
The farmer should get the right price for his crop and have access to fertilisers, farm equipment and information without hassles. Farm loan waiver is an easy tool for the politician to win votes but is not a solution to the problems of the farmer on the field.
If corporates have taken undue advantage of the banking system and looted public money, the role of the banker-corporate nexus should be investigated and the guilty should be brought to book. Gandhi's intent to help the grieving farmers is laudable, but the Congress Vice President’s logic of loan waiver is fundamentally flawed and will only help encourage more farmers to join the protests seeking freebies. It is not begging bowls that our farmers need, but realistic solutions to their problems. It's time politicians stopped waving the loan waiver card to farmers and bring about an awareness that benefits them.
Published Date: Jun 09, 2017 11:48 am | Updated Date: Jun 09, 2017 07:30 pm