It disagrees with RBI chief’s view against the decision

BJP Kisan Morcha chief Virendra Singh Mast has disagreed with Reserve Bank of India Governor Urjit Patel who termed loan waivers a moral hazard, and welcomed the U.P. government’s move to waive loans of up to ₹1 lakh for small and marginal farmers.

“Banking is a commercial enterprise, led by profit motive. Mr. Patel spoke with a banker’s perspective. Governments need to take a humane approach. When farmers are committing suicide over indebtedness, then governments have to think of solutions in human terms, and humanitarian considerations. Prime Minister Narendra Modi’s commitment to the people of U.P. on this matter has solved the crisis of faith that was afflicting our politics,” he said.

Better record

He added that farmers had a far better record of return of loans than big corporate houses.

“Also, if you look at the notification of nationalisation of banks back in 1969, it was said that 45% of the funds were to be kept aside for rural areas and agricultural sector, so there was always a social charter to banking systems in our country,” he said.

“Waivers are of course a temporary measure and it has to be backed up by other reforms,” he said.

Mr. Mast, Lok Sabha MP from Bhadohi in Uttar Pradesh, was one of the important sounding boards for the loan waiver promise that found its way into the BJP’s manifesto in the State. “Other States, within the constraints of the federal structure and their own financial considerations should offer a waiver to small and marginal farmers,” he said.

Other measures

The MP said that other farm-friendly measures for U.P. were on the anvil. “We have in our kisan manifesto for the party promised interest-free loans to farmers, a subsidy of up to 80-90% for farmers to keep milch animals like cows or goats,” he added.

He had also written to Food and Civil Supplies Minister Ram Vilas Paswan to specifically add potatoes as a named item to the list of food items served in the mid-day meal scheme.