Mahatma Gandhi said India lives in the villages. Whenever I visited my naani-ke-gaon, my mother would point to the fact that people in villages were honest and lived a more virtuous life than those in the cities. And as I grew up, I agreed with this notion. But it didn’t have to continue for long, as I saw. Each time when my government waived the farmers’ bank loans, it punished the honest and industrious farmers who had planned and cared to return back the loans they took. Such loan waivers, which matched the election schedules to create the right atmosphere for the UPA government to win, rewarded the lazy and corrupt farmers who would take bank loans and would fund their wrong habits instead of using the money to invest in their farm lands. Of course there were farmers who genuinely benefited from the loan waivers, but any other scheme which helped the poor or Below Poverty Line villagers would have helped them anyway. Farm loans waivers were an election gimmick.
I think now we are about to reap the results of our government’s gambles. As this report tells us:
All government banks are reporting an increase in their bad debts on farms loans ranging between 80% and 2000% in the first nine months of 2010-11. The net NPAs of all public sector banks till December 2010 increased by 70% compared to 46% in 2009-10.
State Bank of Bikaner and Jaipur reported the highest increase in non-performing assets (NPAs) on agriculture loans at 2,000% in April-December 2010. The increase in SBI’s bad loans has gone up by 80% compared to the bank’s total farm loan NPAs in the previous fiscal. Andhra Bank reported a 168% rise in NPA while in case of Allahabad Bank, it was more than 157% and for Corporation Bank, it was 205%. Bad farm loans of Bank of India increased by 100% in the current fiscal till December 2010.
Source: “Bad debts on farm loans pile up”, 7 Mar 2011, TNN,
Such high proportions of bad-loans would force the government to waive them again. (This culture of loan-waiving would make the rural banking system ineffective in the long term. People will take loans in order not to pay them off; and banks would be forced by govts to keep granting larger sums of loans to rural area. This is what I call “Killing the golden goose”). In most probability, PSBs would get their due in the form of government money. But ultimately from where does the subsidy come from? It comes from our tax-returns to the government! So in a way, we, the responsible citizens, are funding the corrupt practices happening in the hinterlands…
Given the plethora of scams and scandals which have enveloped the current UPA government, we would be deaf and dumb if we still believe its motives were honest. As the government indulges in large scale corruption, it is part of the same corruption to corrupt the uncorrupted among the citizens too. I see the use of farm loan wavers as an election gimmick to be doing the same to our farmers and to all of us…
Given the plethora of scams and scandals which have enveloped the current UPA government, we would be deaf and dumb if we still believe its motives were honest. As the government indulges in large scale corruption, it is part of the same corruption to corrupt the uncorrupted among the citizens too. I see the use of farm loan wavers as an election gimmick to be doing the same to our farmers and to all of us…
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