Loan waivers to farmers will worsen fiscal deficit of state govts: Icra

Says loan waivers would crowd out pvt sector from accessing bond markets at competitive rates

The state governments ruled by the Bharatiya Janata Party and the Congress seem to be in a race to announce farmer debt waivers.
 
So far, Uttar Pradesh and Maharashtra (ruled by BJP) and Punjab and Karnataka (ruled by Congress) have announced debt waivers.
 
Union finance minister Arun Jaitley had categorically stated that all such schemes have to be funded by the state governments, keeping in mind the Centre's fiscal deficit target of 3.2 per cent of GDP for the current financial year.
 
According to a report by ratings agency Icra, funding of crop loan waivers would likely