Modi, the Prime Minister of Gujarat & UP

Centre announced waiver of farmer loans in UP in fulfillment of Modi's election promise in the just concluded UP Assembly election winning with huge majority, at an expense of Rs.50,000 crores. BJP is still unable to finalize CM candidate and new government yet to be formed and union agriculture minster announced in parliament that central government will pick up the bill. While helping distressed farmers is appreciable the same would have been for all farmers in the country, not just UP.

• This is in contradiction of Centre's outright rejecting the demand of AP & Telangana government's request, 3 year ago, for RBI & Banks assistance in rescheduling the loans and eventual waiver by state governments citing banking norms and credit discipline.
• Farmers are in distress and debt ridden in the entire country, not just in UP. This Centre's loan waiver for UP only is grossly discriminatory.
• Going forward, farmers will never pay back loans, even if they can, awaiting waiver in next elections within 5 years.
• This will destroy public sector banks, which are already saddled with over Rs. 6 lakh crores NPAs mainly due to defaults by industrialists.
• Just 3 days ago, SBI Chairman Arundhati Bhattacharya said such sops may disrupt credit discipline among borrowers.

Apart from plethora of issues being faced by farmers, the foremost & utmost is the MSP (Minimum Support Price) of Centre which doesn't even cover expenses where as logically MSP should cover all expenses plus 50% profit margin for decent farmer livelihood. Lower MSP enables produce buyers to buy below MSP prices pushing weak farmers into distress and debt ridden. Mechanism must ensure that farmer is enabled to sell his produce at above MSP, which was forgotten several years ago. Other problems are non-timely availability of fertilizers and substandard seeds, pesticides, non availability of labour due to MNREGA, storage facilities etc. Erratic rains compounds farmers risk. Crop insurance with easy process of claims is a must.

Crop loan waiver has a major devastating effect of non availability of bank credit in future with fear of non-recovery and farmer will slip into hands of ruthless money lenders with interest rates 4-6 times bank rates. Today only 25% farmers (who are owners of land only) gets bank credit for crops and it must be ensured all farmers whether land owner or not must get crop loan if he is genuinely cultivating. Unless all these issues are resolved within short time frame, farmers will continue to be in distress and nation's future food security comes under threat. And uncontrolled rural to urban migration will not only increase rural distress but also stresses weak urban infrastructure.  

The practice of attending farmers issues once in 5 years during election and forgetting them thereafter must be stopped. It must be on year to year basis at budget time and uniform for all farmers of the country.

My View:

Farm loan waiver and rural focus are policies of Congress, never of BJP. Now I see BJP shifting towards rural issues and copying Congress. Anyway, 70% of population are rural & agriculture based and can't be ignored by rulers. All constitutional office bearers must remember that they are oath & constitution bound, not their election promises which are often senseless and mindless.

Modi, Jaitley & RBI have forgotten all the rules, regulations & principles cited while rejecting cooperation to AP & Telangana for farmer loan rescheduling & eventual waiver by state governments where as now centre waiving UP farmer loans without even being asked by UP Government is height of their arrogance & stupidity and doesn't go well with preservation of unity & integrity of India. Centre's discriminating attitude between states ruled by BJP and non-BJP will ignite north-south divide apart from being unconstitutional, illegal and violation of oath. Shamelessness & arrogance at its peak with Modi reducing himself as Prime Minister of Gujarat & UP.

14th finance commission has not made any provision for this type of money transfer from centre to UP and Budget 2017 has no mention about this item at all. How will this be done? When centre could do UP farmer loan waiver without budget & 14th Finance commission provision, why cant it grant special status to AP as promised while passing AP Reorganization Bill in Parliament in 2014? Any answer from Modi, Jaitley, Venkaiah Naidu etc? They won't answer because they are answerable to none.

PS: Unless rules are modified restricting spending money strictly as per provisions of approved budget and discretionary spending money is restricted only during war & natural calamity times by executive orders, irresponsible and unmonitored spending through banks and PSU's will go un-audited by CAG and unnoticed by parliament and is detrimental to fiscal discipline.