Originally Posted by hemi
IMO,its vote bank politics played by PC.One of my friend(farmer by profession) pointed out,quiet a lot of farmers(down south)owning less than 2 hectares are infact doing moderately well and getting the benefit of this loan waiver rather than those who are in deep debt.
As KK said, there are farmers who have more than 2 hectares but since they live in joint families the actual holding per individual is very less. Now as per FM proposal you cannot pass them any benefit. Well this is a tricky situation and a problem inherent to some states where joint family holdings are prevalent. Frankly there is little choice with the FM on this. If he did not add that limit, the richer farmers would have found the loophole they were looking for and get away from paying any tax and even get the loans waived. Everyone would have claimed to be living in joint families. The rest of the people i think suffer from the money lenders rather than non-performance. I reckon a cap on interest for lenders should have been implemented.
Originally Posted by bottle
sorry didnt read the whole post but if some ppl are deep in the red , doing away with their debts looks like a short term fix right ? rather if some assistance package was given it could help them get back on their feet again..I mean what will they do next ? get another loan? and from where ?
The idea is, as i mentioned, that you can waive the older loans that are chargeable at a higher rate and which now have accumulated over time into substantial amounts which are impossible to pay for these farmers and instead from a clean slate where now they can have the availability of much cheaper credit.(atleast 50% cheaper) and better conditions with no past baggage.
Ideally if the banks are supported and don't suffer any losses in the waiver, there should not be any effect on rural credit.