Farm-loan waiver scheme - Will it benefit farmers ?

In his popular union budget for 2008 - 2009 Mr. PC has waived loan given to small and marginal farmers to prevent farmers from committing suicides because of nonpayment of loans. The main question is : Will it help farmers ?

Any bank passes loan on basis of documents and proof of income given by the person who wish to take loan. And when the person fails to repay the loan, bank demands the amount very lightly. That means no one is forced to suicide just because of not repaying the loan. Many businessman taking a huge amount of loan and do not repay or repay partly, they need not commit suicide.

Even then the farmers commit suicide, it is a fact. So what is the reason ? The reason is that the small and marginal farmers i.e. farmers not having land more than 2 acres can't produce the papers bank require or on the documents bank may not give the requires loan to the farmer. So they have to find another source, who can lend them money. In small villages there are persons who lend them money with high interest rate. They force the person when one can't repay the loan. Because of the fear, farmers commit suicide.

So the root of committing suicide is not the loan taken from the bank, but is the loan taken privately. So the purpose for waiving the loan will not be fulfilled. The loans from the banks is waived and not the loans taken privately. In my opinion question remains unsolved.

What next ? Loans are waived this time. What about the next year ? They have to take loans again , fail to repay and commit suicide.

Instead of waiving the loans, PC could have taken better steps like extending the period of repayment, waive off the interest. And utilise the funds to improve their earning powers by better technology, knowledge.

The political benefit also will not be on Congress side. As the farmers who had already paid some installments in spite of the money crisis, they feel being cheated. And the genuine tax payers feel that the amount will be taken from the tax they have paid.

Shilpa

ShareTipsOnline.com Team

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