Farm Loan waiver, Boon for Congress, Bane for us!

National Democratic Alliance (NDA) Government implemented ambitious farm loan waiver scheme and set apart Rs.716.8 billion (71,680 crore) for that. This helped 4.3 crore farmers in rural India. And it helped Congress too.



In Uttar Pradesh Congress was not hiding the connection between the farm loan waiver and vote bank politics. Congress in Uttar Pradesh was trying to convert the beneficiaries of the India government’s loan waiver scheme for the farmers into good vote banks for the party. With these 'sleeping votes', the Congress was expecting to win more than 50 seats in this election.

Congress was only having nine Members of Parliament from Uttar Pradesh in 2004 elections. UPCC president Rita Bahuguna Joshi herself stated last year that "Seventy percent of such beneficiaries have a hidden gratitude towards the Congress and could well be termed as sleeping votes."

From that 9 members they attained 22 in 2009 in UP which is a major gain. Farm loan waiver scheme worked in other states too.

Congress formula for winning 2009 general elections was clever approach from their party's point of view. But not so clever from ordinary man's. The audacity shown by P Chidambaram cannot be appreciated, but to be criticised.

Since Congress was able to use crores of public money and convert it in to their votes, expect the worst in the next Budget. You will be taxed heavily.

The Farm Loan waiver package was presented by the Union finance minister P Chidambaram during his 2008 budget. Government implemented and completed the scheme successfully by July 2008.

Economists say that the loan waving is a temporary relief to the farmers and may not stimulate investment and trigger growth. Instead, the government should have taken steps to ensure that such a situation does not arise in future. For that, the foremost requirement is to strengthen agricultural insurance sector and widen its scope with large coverage. At present it is in infancy stage, and less than 10 per cent farmers are covered under present schemes.

Indian Prime Minister Manmohan Singh who himself is an economist is aware of this. But he was ready to shell out Rs. 71,680 crore just for the sake of votes and not for the sake of poor agriculturists. And every one admits that these loans which were waived were Farmer Loans and not Farm Loans.

After the farm loan waiver announcement in the 2008 Budget Finance Minister Chidambaram addressed a press conference. Important question put forward by the media was how he is planning to finance this initiative. His crisp answer was "You have to leave it to my intelligence".

Part I - Congress' victory, credit to Sonia's inner voice
Part III - Octogenarian Advani Vs Rahul Gandhi