Not Considering Farm Loan Waiver: Modi Minister in Lok Sabha
The union minister of state for agriculture also said that farm loan waivers could ‘create/amplify moral hazard.’
Parshottam Rupala, the union minister of state for agriculture, reportedly said in the Lok Sabha on Tuesday, December 11 that the Narendra Modi-led government was not considering waiving off farm loans. Rupala was reportedly replying to Bhavana Gawali Patil, Shiv Sena Member of Parliament’s question.
The Hindu reported that in his written reply to the Shiv Sena MP, Rupala said, “The union government at present is not considering any loan waiver scheme for farmers.”
He added, “Such waivers may impact the credit culture of a State by incentivising the defaulters even if they are in a position to repay the loan and thus create/amplify the moral hazard by discouraging those borrowers who have been regular in repaying their loans. Further, each waiver granted makes it even more difficult to reject any future similar demand,” reported the Hindu.
Pundits have cited farm distress as one of the chief reasons behind the Bharatiya Janata Party’s humiliating defeat in the assembly elections in the five states. It was being speculated that to appease rural voters, the central government might consider farm loan waivers ahead of the 2019 general elections.