debt forgiveness and economy

At this time the debate in the country is fast. The policy commission has not told it to the farmers, including the economy. The Policy Commission has doubled the income of the farmers in the Strategy

  • At this time the debate in the country is fast. The policy commission has not told it to the farmers, including the economy.
  • The Policy Commission has doubled the income of the farmers in the Strategy for New India @ 75 and the development of the infrastructure.


  • In fact, for the first time in 1990 VP Singh’s government waived the loan of Rs 10 thousand crores of farmers all over the country. After that, the NDA Government announced a loan of about 71 thousand crores in the budget of 2008-09.
  • In terms of states, seven states have declared debt relief of about 1.82 lakh 802 crore so far since 2014.
  • Andhra Pradesh has 24 thousand crores, Telangana has 17 thousand crores, Tamil Nadu has 6 thousand crores in 2016 and Maharashtra has Rs 34 thousand crores in the year 2017, Uttar Pradesh has declared Rs. 36 thousand crores and Punjab has declared Rs. 1 thousand crores as debt waiver. .
  • If this is added to the recent three states i.e. potential 35 thousand to 38 thousand crores of Madhya Pradesh, about 6 thousand crores of Chhattisgarh and 18 thousand crores of rupees in Rajasthan, then this figure will increase significantly.

Is the solution to debt problems of farmers?

  • Is the solution to debt problem of farmers? The debate has increased in the country on this. The experts believe that it is not right for the financial condition of the states.
  • The Policy Commission also believes that the problems of loan-farmers are not solved. Earlier, the RBI has said many times that the debt waiver is not right in the interest of the economy.
  • Farmer is the food adder of the country. But there are problems in front of them, one of them is the problem of debt. Many farmers have been suicidal due to lack of debt.
  • The question arises as to how effective the loan is in order of the economy. The Policy Commission believes that steps like debt waiver will only help some farmers. This is not a long term solution to the problems of farmers.
  • The present government has accepted the report of the Swaminathan commission related to the problem of farmers’ removal.
  • Farmers’ loans have increased by more than 10.5 billion rupees, state governments should raise the decision of debt, by looking at their financial status.
  • This will benefit only a section of the farmers. Only 10 to 15 percent of the poor states can be benefited from the debt waiver. Because in such states, the number of farmers taking loans from banks or financial institutions is very small. Even 25 percent of the farmers do not take institutional dues.
  • One aspect related to farm credit is that farmers who take loans for farming can not be used solely to promote farming.
  • In some states, farmers do not use agricultural credit for three-fourths of farm loans, but for other personal needs.
  • The Policy Commission also believes that there is a huge difference between institutional access to farmers’ debt. According to the CAG report, agricultural loan waiver does not help.
  • There is no consensus in two ways that the state’s economy has a negative impact on debt waiver. Most of the cases related to agriculture come under the purview of state governments. But ironically, most political parties adopt a debt waiver formula rather than emphasizing a permanent solution.
  • Under the example of Madhya Pradesh, the decision of the state government’s debt waiver will increase the burden of 34 to 38 thousand crores of rupees to the people of the country.
  • In Rajasthan, debt waiver will be about 18 thousand crores on the public exchequer.
  • Earlier, the central bank of the country, the Reserve Bank of India, has also said many times that due to steps like debt waiver, there is a lot of revenue loss to the country and such decisions have adverse effects on the economy of the country.

Effect on economics and economy of debt forgiveness

  • The question is: How much will the positive impact of the decision of the Karjamaphi be to the states and the farmers. This question is so important that the farmer will benefit from this disadvantage or loss.
  • If the experts believe this is just a political decision. It will have negative impact on farmers and the state’s economy.
  • Actually, the benefit of this loan can be extended to some extent to the big farmers, but it will not have any effect on small farmers because big farmers are in a position to repay their debts and they can also take the loan. That’s why its advantage can also be lifted.
  • While small farmers will not have any particular advantage, on the other hand, it has a very negative impact on the state’s economy.
  • If you look at the data of the last few years, there is more fiscal deficit at the Center compared to the states. But the way state governments have announced a debt, the fiscal deficit is expected to increase further.
  • To compensate for this, the states will have to borrow from the center or through other options and the other development work will be affected by some reason or the other.
  • Apart from this, the State Governments will have to pay more interest on the payment of the loan from the outside.
  • Actually, the state fully carries the debt. The biggest impact on loan credit is on the rating given by the credit rating agency.
  • Such an agency never gives a better rating to India. Because, while giving the rating only the Central Government is not seen, but it also contributes to the states too.
  • With increasing fiscal deficit continuously, such agencies would always look at the Indian economy with a view of doubt.
  • Although the central government is in constant effort to keep the fiscal deficit target limited to 3.3 per cent of the GDP, but this decision of the states will have difficulties in achieving this goal.

How to solve the problems of farmers?

  • The question is, if the farmers had to improve their debt, they would have been long ago, but this has not happened so governments need to take the necessary steps to improve the condition of farmers.
  • In such a situation, it is important to focus on the marketing of products along with the purchase, maintenance and maintenance of farmers in place of the debt, so that prices of the products remain stable.
  • To increase the income of the farmers and to make farming beneficial, it is necessary to emphasize the measures to get a permanent and long-term solution to the problem of farmers rather than resort to measures such as debt waiver.
  • The policy commission has mentioned these measures in a new India strategy.
  • Develop a marketing and infrastructure for long-term solutions to farmers’ problems. The farmer has to link to the market.
  • Most importantly, raising capital investment in the agriculture sector which is very low. Investment in those states is very low, where debt forgiveness has been done. There is pressure on the budget of these states.
  • Due to production loss, drought, excessive rainfall, lack of weather, lack of water are such problems which are the main factors for the farmers to increase the stress, which is very important to get a permanent solution.

Policy Commission’s strategy of doubling the income of farmers

  • The Central Government has targeted to double the income of farmers by 2022 and on this basis agriculture is working on the policy.
  • On December 19, the Union Finance Minister issued a strategy prepared by the Policy Commission for the new India, it has been named ‘Strategy for New India’ @ 75 ‘.
  • It has been informed about the steps being taken by the government to double the income of the farmers by doubling their income.
  • The Policy Commission has started a series of new initiatives to make significant improvements in the agricultural sector.
  • This strategic document of the Policy Commission has emphasized the development of cultivation in productivity and capacity.
  • The Policy Commission has asked to expand the e-national agricultural market, to increase the reach of farmers for their produce to the markets.
  • Agricultural Product Marketing Committee, instead of the law, has been emphasizing to make farming entrepreneurs in the agriculture sector by bringing agricultural produce livestock marketing policy.
  • The Policy Commission has acknowledged that the formation of Integrated National Market is a necessity for agricultural growth to end the free export regime and essential commodity law.
  • Zero budget has been emphasized for strengthening the cultivation of natural farming in order to improve the condition of the agricultural sector.
  • The Policy Commission has explained a partial solution to increase the income of farmers to increase the minimum support price.
  • The policy commission has asked to constitute a tribunal instead of the agricultural cost and value commission.
  • In the strategic document it has been said that the government should consider setting up agricultural tribunals in place of the provisions of Article 323B of the Constitution, instead of the Agricultural Cost and Value Commission.
  • The government announces the minimum support price to get the right value of their produce and prevent prices from falling in the market.
  • Minimum support price is announced for 22 kharif and rabi crops on the recommendations of the Agricultural Costs and Prices Commission.
  • The policy commission is in favor of arranging the auction on the reserve price of agricultural produce to increase the income of the farmers.
  • The strategic document states that instead of the minimum support price, a group should be formed to find the possibility of minimum reserve price, which may be the starting point for the auction of produce in the mandis.
  • According to the policy order, this group should also check whether the MSP can be decided on the basis of three different criteria?
  • These are the three criteria – more product than required, domestic market deficiencies, which are available at home and globally and such products which have a domestic and global level.
  • The Policy Commission has suggested checking options to include private traders who have been traded in the markets to support the Minimum Support Price Mechanism through future incentives and commission payment system.
  • The Policy Commission believes that MSP or increasing prices can only be a partial solution to the problem of ensuring the beneficial returns to the farmers. For long-term solutions, a competitive, stable and integrated national market should be built which will make possible better value search.
  • The policy commission has described contract farming as essential for micro irrigation and contract farming for the development of the productivity and capacity of the farming.
  • Regarding agriculture exports, the Commission has suggested that the government should bring a consistent and stable agricultural export policy which is ideally fixed with the thinking of 5 to 10 years. This policy should be reviewed in the meantime.
  • The Commission has also talked about modernization of agriculture sector through improving irrigation facilities, marketing improvement, crop harvesting and improved crop insurance products.
  • To ensure access to fertilizers to farmers, the target of becoming self-sufficient in the production of urea has been fixed by 2022.
  • The pilot project has been successfully completed in several states, giving direct cash benefit in the evacuation ie DBT.
  • Apart from all this, it is important that farmers get better information about schemes and policies being made for the benefit of agriculture.
  • These are some of the measures which will help in doubling the income of farmers by 2022.

Agricultural in india

  • Nearly half of the country’s workers are dependent on agriculture for employment. In recent years, economic activity in the country has increased, due to dependence on employment on agriculture, but there is still pressure on agriculture and farmer.
  • Agriculture and agro-based industries contributed 17 to 18 percent in the country’s economy.
  • Agriculture contributes 16 percent of the country’s exports, besides agriculture is the means of livelihood for nearly half of the country’s population.
  • According to the 2011 census, 15.97 million hectares of land is being used for agriculture. This is the highest in the world after America, despite this there has not been a major change in the situation of farmers and agricultural laborers in the country.
  • Many times the income of daily wages is much higher than the people engaged in agricultural operations. Most of the farmers engaged in farming have got entangled in problems related to farming and debt.
  • There are mostly small and middle holders in the country. Every farmer family has an average of 1.08 hectare land in the country. On average, there is a monthly earning of 6,500 monthly income from so much land.
  • The monthly expenditure on farming is many times more than that, obviously the scope for profits in agriculture has remained very low.
  • Regular farming families have no way other than loans. People are turning to other businesses.
  • According to an estimate, there are more than 100 million workers in the agriculture sector in the country, although the number of agricultural laborers is continuously decreasing.
  • According to the census, 60 percent of workers in the 1990s were dependent on farming. As of 2011, their number has dropped to 49 percent.
  • Actually, most workers are uneducated, untrained and landless people. Extraordinary cultivation has pushed these people into the dark wells of poverty and debt.
  • In the areas where workers are in need of wages, the wages are quite low. This does not make any significant changes in their lives and, at last, most people get stronger back to the village.
  • Between January and December 2003, a survey of NSS found that 48.6 per cent of the farmers in the country were indebted.
  • From January to December 2013, it increased to 52 percent for the 70th round.
  • In the 59th round, the average loan of farmer households was 12,585 rupees, which increased to Rs 47 thousand in the 70th round of the survey.
  • The biggest harvest of this is the decrease in cultivation and constant input in the input of agriculture.
  • Farming is the only enterprise in which the farmer does not have the right to fix the price of yield according to its cost. Electricity, water, manure, seeds and wages are constantly increasing, the cost of farming is increasing, but in that proportion, the farmer is not getting the cost of production.
  • Apart from this, there are many factors including weather, market forces, government policies, import-export policy, which decide the fate of the farmer.
  • The government decides the prices of most crops but the costs are not governed by the cost of the government nor the farmers.


Politicians and economists are seen face-to-face on farmers’ debt waiver. On the one hand political parties are gaining power by making promises of farmers’ debt, they are appealing to the Election Commission to stop this trend. A better way to help farmers is to provide them with the need of farming rather than a loan-like facility and increase investment in agriculture. Governments need to take initiative in this direction to prepare such schemes for the farmers so that the poor from the poor do not need the loan and they can become financially self-sufficient.