Farm debt waivers not favoured by ex-RBI heads

D Subbarao said bank accounts don't translate to financial inclusion; Bimal Jalan said financial inclusion had to be combined with financial stability

At a discussion on policy, two former Reserve Bank of India (RBI) governors were critical of the farm debt waiver announcements by some state governments.

Y V Reddy, ex-governor, said such decisions would not help the economy. C Rangarajan, another ex-governor, agreed and said it was better to instead give farmers more time to repay.

"Loan waiver is not good for economic or credit culture. Every political party in India has given farm loan waivers in some state or the other or at all-India level. It is a political decision but cannot be justified in the longer run," Reddy said,