Will loan Waiver lead to corruption among farmers?
M. V. Kamath, Free Press Journal
March 13, 2008

If a man enters a government office and pays a clerk a hundred rupees to move some papers he will be accused of corrupting the petty official through bribery. What shall we call Finance Minister P. Chidambaram who is willing to underwrite farmers' debts to the tune of Rs. 60,000 crores, a little ahead of the time for the next general elections? That he is persuading farmers to vote for Congress is openly bribing them? What kind of ethics is the UPA government pursuing? Or is it that giving a clerk a hundred rupees is bribery but giving away Rs. 60,000 crores of public money is an instant of showing generosity and concern for farmers in distress? Admittedly there have been many cases of farmers' suicides.

Just in four large states, Maharashtra, Andhra Pradesh, Karnataka and Madhya Pradesh, there have been 89,362 cases of farmers' suicides between 1997 and 2005 or 44,102 between 2002 and 2005. But does that mean that there aren't farmers who are in great and urgent need but who haven't committed suicides? And granting that all farmers whether desperately poor or measurably self-sufficient will have their debts waived off, what about non-farming rural Indians who live on the border line of starvation but won't get a paise from the large-hearted Mr. P. Chidambaram? And even worse, what about some 850 million people whose average income does not exceed Rs.20 a day and have to support families on that meagre earning?

What would they think of Mr. Chidambaram's much publicised but patently hypocritical care for the poor? That to be entitled to have one's debts written off by the government, one has to be a farmer? Or one must commit suicide? And that poor non-farmers drowning in debts are not entitled to help? Mr. Chidambaram and his party are warned; when the BJP tried to sell itself on the `Shining India' slogan, the people voted it out of power.

Those who feel neglected in Mr. Chidambaram's budget may similarly get Congress thrown out with a vengeance. And deservedly so. It may be safely accepted that large International private banks are not involved in giving loans to rural farmers. Those who have given loans would largely be scheduled banks, state banks, regional rural banks and co-operative credit institutions, if one forgets individual and rapacious money lenders. No statistics are available on this score. The private money-lenders would be more than happy at Chidambaram's bravado. They would get back the loans they had given at usurious rates calculated at between 20 to 50 percent per annum and in some cases even more.

The Rural finance survey 2003 carried out by the World Bank and the National Council of Applied Economic Research showed that 87.03 per cent of marginal farmers and 69.21 percent of small farmers had no loans from formal institutions. So, what Mr. Chidambaram is doing is to support ruthless and callous money-lenders, who must be chuckling all the way to their banks.

Also let it be remembered, it is not the Congress Party that is shelling out Rs.60,000 crores from its party funds It is the money picked out from the pockets of the common tax payer. The latter doesn't get any credit, when he should. It is the Congress Party which swallows all praise. At this point one may well ask; what about those tribesman from Bihar to Andhra Pradesh and even way down in what is being described as the Red Corridor, who have turned Maoist and are attacking the very base of Indian Unity? They are the ones who are attacking police posts and not only killing policemen but civilians as well. And they are increasing daily in numbers.

What are we doing to make them give up their arms and return to normal living? They may not have bordered money and they may even have been unproductive. But does that mean we should look the other way when they are indulging in murder and mayhem?

The Chidambaram budget is a cruel joke. It seeks to elicit praise and votes by pretending to care for the poor farmer, who, no doubt, needs help if only because he is the man who produces foodgrains and with whose toil, his fellow countrymen may be reduced to starvation or, as it happened in the fifties, be reduced to go begging for food from the United States.

The farmer undoubtedly merits priority assistance. But has Mr. Chidambaram looked into the case of tribesmen-turned-Maoists? The indebted farmer does not kill. The impecunious Maoist does just that. How is one to wean him from his terrorist ways? By distributing another Rs.60,000 crores among them? The truth is that Mr. Chidambaram has been thoughtless and insensitive, to grim reality.

If he thinks that by reducing the price of two wheelers and giving some other sops, he will get middle class votes, he is in for a shock. The reaction would be one of `thanks-but-no-thanks' considering that if a middle class employee wants to buy a two-wheeler, he would do so anyway, whatever the price. What is shocking is that the government has given up the linking of rivers project on grounds that it is short of cash. In the first place it must have been made into a priority case for implementation.

What is more important; executing the project, thereby not only providing jobs to the jobless who number millions or giving a tax rebate of Rs. 44,000 to the middle class earner of Rs.10 lakhs per annum. Executing the Linking-of-rivers project would not only have produced enough jobs for the poor to pay off debts, but just as importantly, farmers would have been provided with plenty of water to produce more crops and thereby earn more money.

It would have been a win-win situation. The plain truth is that this is a cynical budget. It in effect amounts to robbing Peter to pay Paul. And how will Mr. Chidambaram recompense the rural credit banks which would now be forced to shell out lakhs of rupees which they could ill afford to do? He says: "Whatever loans are written off, an equivalent liquidity will be provided to the banks concerned". And how will this be done? Mr. Chidambaram will not tell because he does not know.

Not all the money stacked in Swiss Banks by many of our leaders can recompense the rural co-operative banks. Presumably Mr. Chidambaram will go into an overdrive at the Nasik Security Printing Press to print thousand rupee notes in millions and bravely hand them over to the CEOs of banks, as a gift. Never mind if the inflation rate will then rise to the skies.

How more vicious and thoughtless can one be? What is even worse is the corruption that Mr. Chidambaram will encourage among debt-ridden farmers who may deliberately default on payments to take advantage of the Finance Minister's largesse. This is deliberately destroying the very foundations of our moral values. He should be ashamed of himself.