Two categories of farmers will benefit if the loans are waived: marginal and small farmers. The average land holding of a marginal farmer in India is 2.37 acre whereas that of a small farmer in India is 8. 67 acre
New Delhi: With general elections just a couple of months away, the Narendra Modi government is likely to write off loans of all such farmers across the country who own up to 10 acres of land. Highly placed sources in the government told MyNation that the decision can be announced either in the upcoming Union Budget or in a separate announcement after the Budget.
The government has the 2011-2012 agricultural census as the basis for setting at the 10-acre limit. According to that census, 4.9% of farmers control 32% of India’s farmland. The 10-acre limit is meant to exclude the big farmers who are otherwise affluent or rich from this loan waiver by the government, which is clearly aimed at appeasing the large poor farmer base of India ahead of the crucial election season.
Who all will benefit?
There will be two kinds of farmers who will benefit from the bonanza — marginal and small farmers. The average land holding of a marginal farmer in India is 2.37 acre whereas the average land holding of a small farmer in India is 8.67 acre. These are the two categories that are expected to get a reprieve from the banks that had issued loans to farmers. It leaves the medium scale and large scale farmers out of the benefit scheme.
While some farmers own these small tracts of lands individually, some small organisations hold lands on a small scale in rural India. It's unclear at this moment whether the government wants the benefit to reach only such farmers who operate as individuals or also those who operate as small organisations.
Dole on a roll
Presuming the Modi sarkar keeps those who fall in one of the classifications but operate an organisation in the list of beneficiaries, there will be a total of 92,826 operational holdings in marginal category, 24,779 holdings in the small category and 13,896 in the semi-medium category. All in all, there will be 1,31,501 operational holdings that are all set to get benefited directly from this scheme of the Narendra Modi government.
Loan waiver politics
It is an old debate whether economic reprieve can yield long-term results in strengthening farmer or not, but it sure does give political dividends. No wonder, our netas love it. The BJP promised a loan waiver in Uttar Pradesh that brought it to power, albeit with other factors like a pro-Modi sentiment due to demonetisation playing a role in the Assembly election. Soon after the new government was sworn in, chief minister Yogi Adityanath initiated the process of waiver of crop loans worth Rs 7,371 crore in the first phase. In spite of the criticism of initial glitches, loans worth an estimated Rs 36,359 crore benefiting 8.6 million farmers are being waived off.
Soon, the 'trick' was replicated in Punjab, Maharashtra, and Karnataka where the Congress, BJP and JDS-Congress combine had to do the same. Even in the recently concluded Assembly elections, one of the reasons of the Congress's success is its strong pro-farmer pitch and the promise of a loan waiver.
But this time, if sources are to be believed, the waiver will be replicated across the country. Just before a high-octane election, this bonanza is surely readied with the political dividends in mind. Economists may argue it's bad economics, but ask a farmer. For them, it's truly achhe din.
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Last Updated 25, Jan 2019, 9:22 AM