Kerala - Thiruvananthapuram   

Waiver to complement State initiative

THIRUVANANTHAPURAM: Kerala has been unreserved in welcoming the Rs.60,000-crore farm loan waiver programme announced by Union Finance Minister P. Chidambaram in his budget for 2008-09.

May be due to the compulsions of political rhetoric, there have been a few notes of scepticism in the State with respect to how the Union government would get the programme implemented. However, cutting across political affiliations, everyone sees it as a great gesture, even a surprising one.

It was something the critics of Mr. Chidambaram’s “neo-liberal tendencies” had not expected from him.

Farmer indebtedness was a key campaign issue in Kerala during the 2006 Assembly elections.

Over 500 suicides since 2002 have been officially attributed to farmer indebtedness here.

One of the first things the Left Democratic Front government did after coming to power in May 2006 was to set up a Farmers’ Debt Relief Commission through a legislative exercise.

The commission, which would study cases of indebtedness among the farmers and recommend loan waivers to the government, even has the power to negotiate and adjudicate on disputes relating to the loans the farmers had taken from private money lenders. The fruits of the commission’s activities are only beginning to reach the farmers.

In Wayanad, one of the districts worst affected by the farm crisis, the commission recently recommended writing off farm loans worth Rs.60 crore. This constituted loans below the level of Rs.25,000 taken from cooperative banks only. When the commission’s exercise stretches to the other districts, the liability under this category of loans alone would most likely go beyond Rs.750 crore or so, according to Agriculture Production Commissioner K. Jayakumar.

Planning Board member K.N. Harilal said it was unfortunate that Mr. Chidambaram’s programme covered farm loans from only public sector banks and cooperative sector. Scheduled commercial banks are outside the ambit of the programme.

Indebtedness to private money lenders, the most cancerous type of all indebtednesses, too cannot be addressed by this programme, according to him.

The Kerala initiative, therefore, has a great deal of relevance even in the context of the Chidambaram initiative. The challenge now for the State government is to ensure that the Debt Relief Commission’s activities complement the new Central programme to ensure that the farmers receive optimum relief.

Mr. Jayakumar said the State government would urge the State Level Bankers’ Committee (SLBC) to convene meet as early as possible to plan the banks’ initiatives under the Central programme. There is no time to be wasted since Mr. Chidambaram has specifically mentioned June 30 as the deadline for setting the ball rolling, he said.

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