Thursday, 8 June 2017

RBI warns against farm loan waivers

  • Farmer loans amount around Rs. 3 lakh crores and farmer suicides during past two decades exceeded 3.18 lakhs. Needless to say agriculture is in distress last two decades. Mechanization, modernization, land reforms for land holding consolidation, warehousing, irrigation, quality inputs, marketing etc requires investment of about Rs. 3 lakh crores per annum for next 5 years. otherwise farmer will continue to be debt ridden and farmer suicides will remain unabated.
  • No political party will win 2019 election without farm loan waiver promises. Till then farmers will avoid paying loan repayments, especially after Modi farm loan waiver promise for winning UP elections 2017.
  • Large waivers like this will pull down economy backward by 2-3 years and state governments running risk of economic collapse is all the more likely. But no escape.
  • However these amounts are not so great when compared to Bank's NPA's in excess of Rs.8 lakh crores and another Rs. 6 lakh crores as stressed investments in Telecom sector. After all Agriculture is livelihood for majority of Indians (less educated and less skilled) and the only avocation in rural India.
  • This is the price nation has to pay for neglecting rural India and chasing dollars and in the process making rich more richer during the past 25 years of liberalization.

If the RBI agrees with the finance ministry all the time, then it is superfluous; 
And disagrees all the time, then it is obnoxious ... YV Reddy
RBI Governor is neither subordinate nor equal to Finance Minister ... YV Reddy

My View:
RBI which kept stoic silence for Modi's senseless demonetization that costed nation over Rs.128,000 crores during Nov & Dec 2016 months and insurmountable consequential damages, warning Modi now on farm loan waiver consequences makes me believe that it is a conspiracy by Modi & BJP to avert farm loan waivers after UP, for Modi is no friend of farmers and rural India.

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