Waiver of Mass Debt (WMD)

The problem of rural debt in India was highlighted last month when the government used the budget to grant a $15-billion waiver to indebted farmers.

Vijay Mahajan from BasixIndia compares this step by the government to US and UK's basis of fictional threat on Iraq since it is based on "half-baked analysis of half-truths, but well designed to benefit thosebehind it".

"Apart from the gross inequity in the name of small farmers, the loan waiveris particularly inept as it completely fails to address the underlyingcauses of the Indian agrarian crisis -
1. Dwindling size of land holdings;
2. Low percentage of even protective irrigation; and where there was irrigation, tapering yields due to long years of mis-fertilisation and increasing level of pesticide resistance.
3. In dryland areas, no significant varietal improvements nor measures for coping with recurrent drought.
4. Increases in input costs, coupled with lower relative prices forproduce, and price fluctuation, has meant that agriculture is not very profitable even for commercial farmers. For small farmers, with imputed wages for family labour, farming does not even break even.

The same Rs 60,000 crore could have been used todrought proof 60 million ha of dryland @ Rs 10000 per ha, which would permanently secure the livelihoods of at least 3 crore of our poorer, farmers in rainfed areas."

He feels that the money should have atleast been credited to bank accounts of farmers.

"This would also have incentivised banks to open no frill accounts for 5 crore farmers who don't have a/cs as per the recently adopted national financial inclusion plan."

The mystery is:

"why did not the Left argue in favour of a more equitable waiver? Have they lost interest in the agrarian vote bank afterNandigram? Or is it a deal which we will understand many years later? "