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How a loan waiver plan robbed farmers?
Tue, 9 Oct Pre-Open

The government's farm debt waiver scheme is under scrutiny by Comptroller and Auditor General (CAG) of India. In its draft inspection report CAG has highlighted some serious shortcomings. It has alleged that the benefits of the scheme (waiving of the loan) accrued to the undeserved (wealthy farmers) and the genuine farmers were left out . It has also pointed out major deficiencies in identifying the beneficiaries (poor farmers) itself. The final report will be tabled in the winter session of the parliament soon.

While the end result is yet to be awaited it has raised some serious questions on the government's loan waiver plan. Was the populist measure just used as a means to gather vote bank?

It may be noted that the debt of more than 3.7 crore farmers were written off just before the 2009 Lok Sabha polls. The states that benefited the most of this scheme were Andhra Pradesh, Maharashtra and Uttar Pradesh. And the government benefitted handsomely from them as well. Out of the 207 Member of Parliament (MPs) that were elected to Lok Sabha from the Congress party 69 were from these 3 states.

Clearly, the government's populist policy had paid off. 33% (69/207) of its strength in the parliament came from the states which were the major beneficiaries of its loan waiver scheme. While announcing populist measures to attract vote bank is the part and parcel of politics, what is annoying is the fact that those measures have failed to benefit the poor. Though the government continues to deny that and says that the benefit accrued to the eligible CAGs initial finding do raise eyebrows.

It may be noted that the audit into the debt waiver plan has been done after taking Reserve Bank of India (RBI)'s help which helped looking into the books of regional rural banks and co-operative banks that disbursed the relief. Thus, the initial of findings that the benefits were cornered by undeserving farmers does have some weight. Also, the fact that the said populist measure turned out to be a game changer for Congress as far as the 2009 Lok Sabha polls were concerned raises further apprehensions.

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