Tuesday, October 16, 2012

That tall claim left, right and centre

The UPA government would like all of us to actually believe it did much for rural India, but Rajan Prakash disputes that tall claim left, right and centre

Sharma’s point is supported by the statistics of NSSO. It states that the average monthly income of an average farmer family is Rs.2,115. The average family comprises five members and two cattle. The UPA government lent a deaf ear to the pains and ordeals of farmers in Vidarbha and Bundelkhand for four years, but when the media made a hue and cry about the issue, the government reluctantly started paying attention. Hastily, a tour by the Prime Minister was arranged. People thought that happy days were in the offing. However, they soon had a reality check. The government announced a package of piffling Rs.37.5 billion that only included waiver of loan in six districts and restructuring of loans in the rest. In reality, government only waived the interest on the loan and not the principle. The government then patted its own back by claiming that farmers can take fresh loans easily now without the liability to pay the last one. In short, the government did not attack the cause. It just waived off the medicine fee.

The interest on the loan amount in the six districts is to the tune of Rs.7.12 billion. It is important that people get their loan amount on time. That is precisely why the RBI has directed the subsidiary banks to earmark 40% of the loan amount for the primary sector, of which 18% has to be left exclusively for agriculture. But statistics tell a different story. In the last five years, banks have only disbursed 11-12% in loans to this sector. Instead of pulling them up for not meeting the target, the government has shamefully ensured that the interests of the banks are served. Whether the farmer wins or loses, the bank always wins. Farmers have to return the loan within the agriculture year. However, in the case of calamity or loss of crop, it becomes practically impossible for the farmers to pay the loan back. They do have the provision to take crop-insurance. However, because of limited awareness about the program and red-tapism, most of the needy farmers fail to do so. And so the interest keeps on increasing. The same happened in Vidarbha.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
Posted by at
Labels: , , , , , , , , , ,