Image: Indian Express
Government think-tank NITI Aayog said that even as states like Maharashtra, Uttar Pradesh and Karnataka announced loan waiver to farmers, it barely helps just 10% of those in need. According to Hindustan Times reports, pitching for “targeted relief rather than blanket loan waivers”, Prof Ramesh Chand, a member at the Aayog, told, “Some deserving people get excluded while non-deserving ones get the benefit.”
While supporting government intervention in farm distress, he said, “Some farmers are under great economic distress and they need relief. But providing targeted relief will have a much higher welfare impact.”
Pointing out the facts behind loan-waiver, Chand referred to the National Sample Survey Office data from 2012-2013 to point out that only 18% of farmers take loans from institutional sources. However, the latest data from the National Bank for Agriculture and Rural Development (NABARD) accessed by the Aayog puts repayment figure at 70%. “So, eventually, a loan waiver benefits around 5%-10% of farmers and not all of them are non-wilful defaulters.”
It is also to be noted that 50% of those farmers who take loans don’t do it from non-institutional sources like money lenders, paying higher rates of interest. In some places, the rate of interest can be as high as 3-4% per month and is the real cause of debt trap, pointed the think tank.