New Delhi: In the last few years, many political parties have started announcing massive debt waivers for cheap popularity and quick gains. The negative impact of this decision is now clearly visible on the economy of the states. In the last five years, these states have waived agricultural loans worth Rs 2,31,260 crore. But so far the states have made a provision of only Rs 1,51,168 crore from their budget. If states like Madhya Pradesh, Rajasthan, Karnataka and UP do not recover their financial condition in the next two-three years, then they may have to face huge difficulties in adjusting the amount given under the farm loan waiver.

Especially at a time when, due to the current economic downturn, all the sources of revenue of all the states are being speculated to dry up. The Reserve Bank of India, which has expressed reservations about farm loan waiver many times before, has once again expressed its unhappiness. A new RBI report has mentioned the adverse impact on the financial situation of the states and how it affects the culture of agricultural credit among a large section.

According to the report, in 2014-15, two states (Andhra Pradesh and Telangana) announced farmer loan waiver, while in the year 2018-19, four big states (Karnataka, Madhya Pradesh, Rajasthan and Chhattisgarh) implemented it. It was also implemented in UP, Punjab, Maharashtra and Tamil Nadu. In the current financial year (2019-20), a provision of Rs 39,703 crore has been made jointly in these budgets by these states. These states are spending 3.5 percent of their total annual budget only to implement the Agricultural Debt Waiver Scheme. Let us tell you that debt waiver has become an important electoral issue in the recent elections due to the agrarian crisis.

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