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The debt waiver announced by the Union Finance Minister in the recent Budget has made news, and for the right reasons. The waiver may have been announced purely with the benefit of farmers in mind but, if at all, it will help only in the short run and will make no long term and sustained contribution towards good of farmers and the agricultural sector. Farmers who have honestly repaid their bank dues on time are sure to feel cheated. The waiver may induce farmers, in general, not to value a repayment culture and default rates could surely go up.

As far as the banks are concerned, it does help them clean the loan books to the extent of such waivers, but the mechanism of such compensation to be made by the government is also not clear. And last, if such periodic waivers are announced, why ignore the other sectors, particularly the SSI, and micro and tiny industrial segments?

I.K. Kilam Faridabad

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