Indian agriculture is at stake. From debtors to agricultural soil health everything has been on the line. However, to control such rush, government has laid a serious concern on this matter.
Indian agriculture is at stake. From debtors to agricultural soil health everything has been on the line. However, to control such rush, government has laid a serious concern on this matter. Many policies and schemes have been introduced since. One of it is farm loan waiver which as its name suggest is repayment of farmer’s debt. But, is this step valuable enough? What is its impact on Indian economy? This article deals with the public opinion on loan waiver policy.
The farm loan waiver may adversely affect the Indian economy both in short and long run, the loan will be payed to lenders from tax payers money. Farm crises might be reduced for a period of time but this will hugely instigate the future loan waive echoes. The money spent on education, healthcare and other economic issues will be decreased which will demoralize the actual tax payers.
In short run it will increase the inflation. The current aim of RBI policy is to maintain inflation with respect to the ideology that a stable economy is pivotal for growth. As these schemes will raise inflation the future prospects of RBI cutting interest rates, which will benefit economy as more loans will be sanctioned leading to more projects leading to more employment, will be deferred and the repercussions will be diminishing prospects for future job opportunities. Each government has limited income which it collects from taxation and other resources. The loan amount is so humongous that it will drive away a huge share from the government’s budget. The government will either have to cut expenditure on other projects or will have to go for huge fiscal deficit.
So as a whole, it is quite visible that the scheme despite of improvising the agricultural field is simultaneously affecting the other economically unstable grounds. Of course it is understandable that betterment of farmer’s is equally important as 60% of population is dependent upon agriculture only. So the solution could be broader than confined to one scheme, all the aspect must be judged and a more rational decision should be taken.