Rise in farm income, not loan waiver, is the panacea for rural distress

The Congress in Madhya Pradesh has already announced that it will be waiving loans up to Rs 200,000, which will cost in excess of Rs 350 billion

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Unity is strength: But it would be premature to expect a major policy shift or a sustained political will in favour of the farmers

Kabir Agarwal | The Wire

Last Updated : Dec 20 2018 | 09:53 AM IST

On Monday, the newly appointed chief minister of Madhya Pradesh, Kamal Nath, proudly announced that his first executive decision was to waive farm loans in the state.

While campaigning for the assembly elections, the Congress party had promised that if voted to power, it would waive farm loans within 10 days. Speaking to reporters on Tuesday, Rahul Gandhi gloated over the fact that this was done within six hours in Chhattisgarh and Madhya Pradesh, with Rajasthan to follow soon.

But implementation is not going to be easy. According to Reserve Bank of India estimates in 2017, loan waivers in these three states could cost around Rs 410 billion. But, that estimate is at the lower end, since it considers loans waived up