(REPORT) Loan waiver can’t help Bundelkhand farmers: economist

The union government’s decision to wave off agriculture loans to the tune of Rs.600 billion ($15 billion) is unlikely to alleviate the sufferings of the poverty-ridden population of Bundelkhand region of Uttar Pradesh, said a World Bank consultant. “While loan waiver has already caused a sharp fall in the stocks of all public sector banks, it would not provide any long-term respite to the harried farmers (of the region),” observed Arvind Mohan, who is also a professor of economics at Lucknow University.

The poverty-ridden Bundelkhand has drawn national attention as several cases of starvation deaths were reported from the region.

“As an individual tax payer, I would praise the budget which is going to reduce the burden of my pocket, but as an economist I would rate it as a bad budget,” he said.

“Even if part of this largesse was set aside for a more meaningful use by creating infrastructure for marketing the farmers’ produce or towards development of concrete pragmatic schemes to promote their long-term economic empowerment, it would have made much more sense,” Mohan added.

“The move might bring political dividends in the short run, but is bound to increase inflation and thereby lead to further price rise, which would ultimately aggravate the miseries of the poor farmer,” he warned.

He said: “What would make things even worse for the government is the next Pay Commission that would put an additional burden of Rs.600 billion on it. Consequently, it would widen the existing gap between resource mobilisation and expenditure to compel the government to take recourse to debt mobilisation which would in turn worsen market conditions.”

However, the budget recommendations have been widely welcomed by the salaried class, small entrepreneurs and particularly women and senior citizens.

“I am happy with the raise in the non-taxable ceiling to Rs.225,000 per annum,” said L.C. Chatruvedi, an 81-year-old retired government official.

Rashmi Tandon, a small-time entrepreneur, welcomed the rise in the taxable income limit from Rs.150,000 to Rs.180,000. “Considering the high rate of inflation and steep price rise, I wish it had been raised to Rs.200,000 at least,” she said.

Self-employed physiotherapist Mayank Srivastava also expressed satisfaction over the hike in the taxable income limit to Rs.150,000.

Courtesy: IANS