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LATEST NEWS UPDATES | Small or marginal farmers: Debt waiver tough call for Punjab -Vibhor Mohan

Small or marginal farmers: Debt waiver tough call for Punjab -Vibhor Mohan

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published Published on Jun 15, 2017   modified Modified on Jun 15, 2017
-The Times of India

Chandigarh: Nearly three months after being sworn in, the Congress government in Punjab is still working on farm debt waiver, its key poll plank in the last assembly elections. But even as the government panel hopes to submit an interim report this week, independent experts point out that given the poor financial health of the state and the Centre in no mood to offer a bailout, the state has four broad options to tackle the loan remission liability.

Sources said the state committee headed by T Haque, former chairman of Commission for Agricultural Costs and Prices (CACP), was still analyzing various alternatives depending on how much the state government can spare for a waiver. Even though Uttar Pradesh, and now Maharashtra, have promised at giving relief to marginal farmers, Punjab government have been hinting at tackling the entire farm debt but without spelling out a roadmap.

RBI chair at Centre for Research in Rural and Industrial Development (CRRID) Prof Satish Verma said the easiest option for the state would be to waive off debt of marginal farmers up to Rs 1 lakh, as was being done by other states. For this, the Punjab government will have to shell out Rs 4,000 crore and nearly 6 lakh loan account holders (farmers) would be benefitted.

The next option would be to club together small and marginal farmers, who constitute nearly 35% of the total farming community in the state. With Rs 11,000 crore, the state can help nearly 14 lakh farmers reeling under financial crisis.

"However, then the state will have to take a call if it wants to consider multiple loan accounts of a single farmer. For instance, a farmer could have two loans of Rs 50,000 and Rs 75,000. If the state decided to grant waiver against one account then the overall remission liability will be lesser," said Prof Verma.

But in case it decided to waive off the entire debt (including multiple accounts) under the small and marginal farmers category, the move would burn a hole of Rs 30,000 crore in the exchequer's pocket.

The third option could be to waive off farm debt of all categories of farmer and this would require mobilization of Rs 63,180 crore. "It is unlikely that the government would include medium farmers and leave out owners of large farm holdings. It has to be marginal/small and marginal or all categories," said Prof Verma.

The fourth option is that the government could go in for debt waiver of all farmers in a staggered manner, which would be a departure from the UP model.

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The Times of India, 13 June, 2017, http://timesofindia.indiatimes.com/city/chandigarh/small-or-marginal-farmers-debt-waiver-tough-call-for-punjab/articleshow/59129346.cms


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