Loan Waiver: Is it a solution?

Recently I received a joke making fun of our CM Mr.Devendra Fadanvis and saying that why can’t he take such an important decision on loan waivers for farmers in Maharashtra as Yogi did in Uttar Pradesh. And I started thinking ‘Is loan waiver a solution to the farmer’s problems?’ and in my opinion, it’s not! Here’s why…

Let me ask a question: Why farmers need a waiver? Answer can be: Because their gross income from farming is not up to the mark so as to repay the loan taken. The reason could be drought, adverse natural situations or any other reason. And guess what its consequence is? They commit suicide. If we see the statistics available on google, bankruptcy is the root cause of majority of farmer’s suicides. And here comes my argument!

When a normal service man or a small businessman takes up a loan for his home or business, he has to pay it irrespective of whether he was jobless or couldn’t do well in business. Banks or government never gives that person a loan waiver and neither he asks for it! Famers argue that it’s difficult for them to repay the loan. But when normal person living in a rented apartment in Mumbai with 50K salary, takes loan of 20 Lakhs, it’s difficult for him also to repay the loan since the living cost is so high in Mumbai. Even after working career of 15 years, that person travels with the overcrowded bus or train just to save a penny out of it! I have personally met a single mother who was working quite hard to feed her two children after sudden death of her husband. These are all real situations which I could closely see when I was living in Mumbai. Life is difficult for them too. Farmers are not the only ones who have hard life (and we should not ignore that not all farmers have tough life. There are many who live lavish life! ) So, here the argument of having hard life doesn’t make much sense.

Again, suicidal tendencies and demand for loan waiver is not common along entire Maharashtra, it’s only present in few parts of it. The next question that immediately pops up in mind is,’Why farmers in Kokan don’t commit suicide?’. People living in drought areas, make an argument that since they have plenty of water and good rain,they are able to produce well and hence don’t commit suicide. But these people usually forget that over rain also destroys crops making their situation vulnerable!

Another point which usually nobody ever even thinks of is when a farmer could not produce sufficient products and cannot make sufficient money, he asks government for loan waiver. But when he could produce surplus of products, do they ever tell government that since this year I could make great profit, please take extra money from me?

The next question I raise: What about the losses? While farmers ask for loan waiver, nobody thinks of who will make up for the losses. Government is an entity and it doesn’t have its own money. So when it gives waiver to farmers, it has to recover for the losses and guess who will have to pay for it: Normal service men and businessmen. Does it seem to be fair to give waiver to one part of society while the other part of society who already pays taxes, personal loan etc have to pay extra?

Is it a solution? No. If we think from all perspective, it’s not. It might give some relief to farmers but will definitely add overload on normal person. I am not saying that farmer’s situations are not tough or their problems are not real. All I am saying that there could be other measures that can be taken like increase in loan tenure, reducing interest rates etc from government’s side rather than loan waiver.

Disclaimer:

The views and opinions mentioned in this article are my personal opinions. The article just tells about my perspective towards the topic. This article does not intend to hurt anybody’s sentiments or make fun of them.