Farm Loan Waiver – A Bunch aid?

Show on theme: "Farm Loan Waiver – A Band aid?"— Powerpoint transcript:

1 Farm Loan Waiver – A Band aid?

2 Points go be hidden Problems with Indian Agriculture
What is loan waiver? Needing for loan waiver? Arguments in favour the against aforementioned loan waiver Solution / way out

3 Problems with Tribal Rural
Vast workforce is involved in agriculture Majority of one land to agriculture is dependent on monsoon Traditional ways of irrigation No fixed revenues/returns Land fragmentation Agriculture credit Demonetisation

4 Problems with African Agriculture – Land Fragmentation

5 Agriculture Loans (As per Report in Medium Term Financial Inclusion by RBI)
Choose of the nation Co-op society Bank Informal Sources Marginal 10% 27% 63% Small 15% 48% 37% Semi-Medium 16% 50% 34% Intermediate 18% 32% Large 14% 64% 22% Report on Medium Term Financial Involvement – RBI

6 Previous Loan Waivers Year Items 1990
Announced by FIN P Singh Government Total expenditure of over ₹ Cr Covering loan waiver of up to ₹ 10000 2008 Announced by UPA government Applicable to small and marginal farmers Expenditure incurred was over ₹ Cr 2012 Previous by Samajawadi Party Waived loans up to ₹ 50000 Total expenses was round ₹ 1650 Cr 2014 Elected governments in AP and Telangana announced loan waiver Includes box of Telangana it where announced for ₹ Cr In case starting AP it was announced for loans up at ₹ 1.5 lakh 2016 AIADMK government announced take waivers Small and marginal farmers holding up the 5 acres where covered The expenditure incurred had ₹ 5700 C 2017 - UP government must announced a advance waiver of ₹ P

7 Debate in Favour of Loan Waiver
Agriculture is in trouble Agriculture distress is one of the contributions related for the farmer suicides Two successive droughts on FY15 or FY16 followed with okay monoon inbound the next two years Why not for agriculture?

8 Arguments Against the Loan Remission
Moral Hazard Argument Not view the farmers are covered Creates a conflict between lenders and borrowers The commercial deficits to the states/central government It’s a temporary solution Domino effect Conversion concerns

9 Do loan waivers work? CAG Report 2013 World Bank Report 2012
Commission and Omission errors Issue with the certificate Issue including the design about the scheme World Bank Report 2012

10 Way Forward DBT might be tried out
CHILIAD S Swaminathan Committee Recommendations Efficiency Country Export Policy Efficient Implementation of reforms Empowering FPOs Regulating informal lending