The Congress’ latest announcement on waiving farm loans in case of the party returning to power in Chhattisgarh has spawned new questions surrounding policy initiatives as well as the political narrative in the poll-bound State.
Chief Minister Bhupesh Baghel, who on Monday made the announcement, compared the decision to loan write-offs for industrialists and said that such incentives for farmers was good for the overall economy. Although the Congress has officially welcomed the move, with spokespersons even calling it a masterstroke, some within the party have a differing opinion. There are those who feel the decision may have been nudged by some adverse feedback on the ground.
“We have run the government for five years, bought paddy [the main crop in the State] for ₹2,500 per quintal. Our claim is that we have made farmers stronger and self-sufficient in the past five years. There is no visible stress, no major suicides because of inability to pay loans. Hence the decision is puzzling and suggests that the reports from the ground may not be very assuring,” said a Congress leader, on condition of anonymity.
Farm loan waiver was a crucial electoral promise made by the Congress in 2018 and believed to have paid a major role in catapulting it back to power after a 15-year-exile in Chhattisgarh. Soon after it was sworn in, the Bhupesh Baghel government waived off around ₹9,000 crores of loans owed by farmers, benefitting 18 lakh of them.
In the past five years, the government has often talked about its initiatives that have strengthened the rural economy, resulting in increasing incomes, acreage under cultivation or number of individuals engaged in farming. Mr. Baghel has even cited factors such as tractor sale figures to back his claims. However, these very claims are inviting the questions on the need for a loan waiver.
Political commentator Neeraj Mishra suggests that if the government has that kind of money, it can make a policy of providing direct incentives to the farmers by increasing the procurement price itself. “The government can increase the procurement budget by adding the few thousand crores that it has to spend every five years for loan waivers. That way, the need for borrowing for input elements such as fertilizers etc can be addressed and there would be no need for other interest groups, be it the banks or the government servants,” he says.
Rajnandgaon-based Sudesh Tikam, a farmer leader who has led agitations on the issue of bonuses and crop insurance and had contested the 2019 Lok Sabha elections on the farmer interest plank, says the sale of harvesters and tractors as claimed by the government may not be a clear indicator of how well the farmers are doing but back the government on farm loan waiver.
“The input costs are increasing for the farmers, be it fertilisers or labour. We also have to acknowledge that the farmer is a social being and has other financial commitments too. Setting aside a miniscule portion of the annual budget to consolidate their votes may be a good strategy,” he says.
Mr. Mishra, as well as the Congress leader quoted above, however differ on this and say such pre-election announcements may encourage farmers to borrow more and spend the money on non-agriculture related expenses in hope of a future waiver. “And when that doesn’t happen, a debt trap awaits them,” says Mr. Mishra.
The Opposition Bharatiya Janata Party questions the timing of the announcement by the Bhupesh Baghel government that claims to be pro-farmer.
“Today, Bhupesh Baghel once again proved that in 5 years he has not done any work in the interest of the public. Now due to fear of defeat they are making announcements daily,” says party leader Kedar Kashyap, adding that in its manifesto the BJP will include promises which would ensure that farmers do not need to borrow money in the first place.
Vinod Verma, the political advisor to the Chief Minister, calls the loan waiver a crucial stepping stone towards making agriculture profitable in the State. “Why are questions not asked when the loans of industrialists are waived off despite them having businesses other than the sick units? When farmers are given relief we are asked why are we giving them money as well as promising loan waivers. When we waived off ₹9,000 crores, the beneficiary count was 18 lakh and if we are to do it again, ₹5,500 crore-₹6,000 crore will be waived off for 24 lakh farmers. The changing debt ratio figures show that the need to borrow has come down and eventually they will be debt free if they are taken out of that cycle,” says Mr. Verma.
