Focus on timely repayment

Abheek Barua’s article, “How farm loan waivers can hurt” (July 27), raises an important issue at a time when Prime Minister Narendra Modi is dreaming of doubling farmers’ income.

Huge pile-up of non-performing assets in banks is an acute problem and the announcement of loan waiver schemes will mitigate it. Credit is indispensable for farmers because there is a wide gap between their duration of earning and spending. Due to several reasons, farmers are not able to repay loans, which is essential for smooth functioning of the credit cycle. The 2011 agriculture census revealed that close to 22.1million of farmers remained dependent on non-institutional sources of credit. This is a matter of great concern. Besides issues such as provision of credit at affordable rates, timely and assured fair price for crops and crop insurance, repayment of credit on time is a challenge.

Instead of implementing loan waiver schemes, steps need to be taken to ensure that farmers are able to repay loans on time. That would be a more fruitful result.

Suman Gill   Hisar

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