A day after several state governments announced farm debt waivers, the NITI Aayog on Wednesday spoke against the measures, saying these steps help only a fraction of farmers and does not mitigate agrarian distress.
“Farm loan waiver is not a solution to farm sector distress. It is not a solution but is palliative,” Niti Aayog Vice-Chairman Rajiv Kumar said at a press conference after the release of its ‘Strategy for New India@75’ document.
“In poorer states, only 10-15 per cent of farmers are benefited from loan waiver as few farmers get institutional loans. In many states, not even 25 per cent of farmers avail institutional credit,” Chand said.
He noted that when you have this kind of variations in states in terms of farmers access to institutional credit, it is not worth spending so much money on farm loan waivers.
“Even the CAG report says farm loan waivers do not help. It is no solution to address distress in farm sector,” Chand said.
Former Niti Aayog vice-chairman Arvind Panagariya also spoke against farm loan waivers.
“A sad race to the bottom has begun. If loan waivers would fundamentally alleviate farmers’ plight, waivers would be a welcome step. But if after 70 years of Independence, farmers remain in distress, we need to seek different solutions,” he tweeted.