Its Ballot all the way............

Since the time the FM finished presenting his budget. I have been pondering since then one proposal... farmer loan waiver costing Rs 60,000. This proposal makes sense only when i look at it from two perspectives... the first, from the perspective the farmer who gets the waiver and second, from the perspective of the parties in the UPA government which have instantly won a huge vote bank.

The more i think about this proposal, the more downsides i note. Isn't this move a disincentive for farmers to be honest in repayments? How would a farmer who repaid the loan by taking pains to save money, cutting down on his meals feel?? Shouldn't the farmers who repaid honestly be also given the money back??

Mind you, I am not against the Government helping the poor farmers. I am against the way of helping them. I am against rewarding the defaulting farmers and leaving out the farmers who were prompt in repayment. I am sure there would have been honest farmers who would have sold parcels of land to repay loans. Why should only the farmers who borrowed be benefited? Why shouldn't this amount be given as a one time grant to all farmers? The farmers who have borrowed can use it to repay the loans and the other can have this as a saving. That way you incentivize the honest farmer do not do any harm to the farmer with a loan.

This loan waiver scheme is akin to the VDIS scheme. The scheme in my view encourages farmers not to repay just like a VDIS encourages black money. Farmers don't repay with a hope of getting a wavier once in five years or so. There is no economic sense in farmer loan wavier. There is only political sense. I am sure the Finance Minister would not have taken this step had this not been his last budget. T

his move is clearly done only with an eye on the ballot. I am sure the farmers loan waiver will be something which Ms Sonia Gandhi and her team will talk about in all their election speeches!!