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The politics of loan waivers: Deep despair of Punjab’s excluded farmers

Lip service: Amarinder Singh sought votes on the promise of a waiver, but now faces heat as more than half the state’s farmers have been left out of the scheme.

punjab Updated: Apr 06, 2018 11:52 IST
Prabhjit Singh
Policemen stop farmers during a protest march in Bathinda. Faced with mounting criticism, chief minister Amarinder Singh recently announced in the assembly that the government will “waive farm loans amounting to ₹9,500 crore within the upcoming financial year 2018-19”.
Policemen stop farmers during a protest march in Bathinda. Faced with mounting criticism, chief minister Amarinder Singh recently announced in the assembly that the government will “waive farm loans amounting to ₹9,500 crore within the upcoming financial year 2018-19”.(HT File Photo)

The weather-beaten face of Rajpal Singh shows signs of anxiety as he stands in one corner of his eight-acre farmland in Punjab’s Bathinda, surveying the standing wheat crop that is almost ready for harvest.

Singh might get a reasonable price for his produce but it’s his Rs 12-lakh loan he is more worried about.

What started off with a debt of a few thousand rupees has now swelled to huge proportions – Rs 2 lakh of it from private money-lenders – and continues to grow every passing year.

Rajpal’s anger and frustration have multiplied over the past three months, ever since the Congress government led by chief minister Captain Amarinder Singh, announced a loan waiver for the state’s farmers.

Grim Picture
  • Ra 73,000 crore is the estimated loan burden of Punjab’s farmers
  • 1/3rd of Punjab’s population is directly into farming and farm labour
  • 22.5% of the state’s GSDP comes from agriculture
  • The loan waiver applied only to loans taken from cooperative societies, for peasants owning not more than 2.5 acres of land and a loan value of up to Rs 2 lakh

The government’s announcement came with a rider, though – it applies only to loans taken from cooperative societies, for peasants owning not more than 2.5 acres of land and a loan value of up to Rs 2 lakh.

A major chunk of the farmers’ estimated Rs 73,000-crore loan burden is from non-cooperative banks. “It’s mere drama,” Rajpal says in Kotfatta village, not trying to hide his contempt. Others are angry too.

Across Punjab, lakhs of farmers — who constitute one-third of the state’s 2.80 crore population — have been staging protests and demanding that all farmers be brought under the loan waiver scheme.

The scene in the state is reflective of a growing farm crisis in several parts of India, sparking protests and similar demands for loan waiver.

For farmers in Punjab – India’s grain bowl where farming contributes 22.5% of the gross state domestic product (GSDP) — the loan burden has turned into a vicious cycle. Rajpal, a father of two, says that while his income has remained almost constant, input costs of farming rises every year, sometimes as much as 10-20%.

Family liabilities including expenditures on healthcare and children’s education takes away a large chunk of income, leaving him with no option but to borrow afresh every sowing season.

“You ask any child in this village, or anywhere else, how the government’s loan waiver scheme has become a joke,” he says. At Kot Shamir village, some 5 km from Kotfatta, a group of elderly people are sitting in front of a fertiliser shop, engaged in an animated discussion. And a mere mention the loan waiver scheme opens the floodgates.

“They [the Congress] ditched us after seeking votes on the slogan of waiving the entire farm loan...but gave a lollypop by bringing only minor loans from cooperative banks under the scheme’s ambit,” says Mukhtiar Singh, a farmer.

Prof Jaswinder Singh Jassi of the department of economics in Panjab University’s regional centre at Muktsar says that the government has to get its priorities right to stem the farm unrest.

Their opinion is unanimous: Not more than a few hundred in the entire state has benefited from the scheme. As farmers continue to protest, the scheme has become a political issue, with opposition parties blaming the government for going back on its commitment.

Faced with mounting criticism, chief minister Amarinder Singh recently announced in the assembly that the government will “waive farm loans amounting to Rs 9,500 crore within the upcoming financial year 2018-19”.

The Aam Aadmi Party (AAP)-led opposition has been scathing in its criticism of the government.

“The much-hyped promise is a colossal let down. Not even half per cent of total farmers under debt in the state have benefited in the first one year... Instead of stemming the tide of farmer suicides, it could drive more farmers to end their lives,” AAP legislator Kanwar Sandhu says.

“It is like Nero fiddling when Rome was burning. States like Uttar Pradesh and Maharashtra have done far better.”

The Bharatiya Kisan Union (BKU) spearheading the farmers’ protest is also not impressed. One of their main resentments, as BKU’s Ekta Ugrahan faction president Jagdev Singh Kojrikalan puts it, is the exclusion of farm labourers — or landless farmers — from the scheme.

“There is no talk of farm labourers who are the worst affected,” says Punjab Khet Mazdoor Union president Lachhman Singh Sewewala.

“There are approximately 7.5 lakh landless or farm labourers’ families in Punjab who have a total debt burden of Rs 5,300 crore, and this amount that is not being considered for any waiver is still less than the Rs 11,500 crore that fugitive diamond merchant Nirav Modi owes to banks,” he says.

Dubbing the scheme a “fake drive”, Kokrikalan has sought a waiver of the entire institutional loans of all farmers, as promised ahead of the February 2017 assembly polls.

Kokrikalan also highlights other demands, including creation of a remunerative market for farmers, reducing input costs and improving the public healthcare in villages and a law to curb exorbitant compound interests charged by private money lenders.

Prof Jaswinder Singh Jassi of the department of economics in Panjab University’s regional centre at Muktsar says that the government has to get its priorities right to stem the farm unrest. “We can’t see farm debt in isolation, as rural life’s social and economic fabric is crumbling, with the government washing its hands of healthcare and education sectors....this has forced the marginal agrarian classes to go for private hospitals and schools,” he adds.

Jassi is only echoing what farmers like Jaspal Singh have been saying all along.