RSS warns Modi government against waiving more farm loans in budget session

While the Narendra Modi government has indicated a possible showering of sops for farmers in its interim budget before the Lok Sabha polls, RSS affiliates have strongly warned against farm loan waiver saying such a move would only worsen the agrarian crisis and further pressurize the banks. Instead, they want a social security net for the farmers.

With agrarian distress expected to be a major plank for the opposition and the Congress promise of farm loan waiver that helped it majorly in its victory in the Hindi heartland state, there are indications that the Modi government may walk a similar path making the February 1 exercise more significant than a vote on account. Buoyed by the Congress coming to power in Rajasthan, Madhya Pradesh and Chhattisgarh, party President Rahul Gandhi has flayed Modi for waiving corporate loans while ignoring the plight of farmers. He has even asserted that a "united opposition will not let Modi sleep" until and unless farmers' loans across the country were waived.

However, the Bharatiya Kisan Sangh (BKS), a sangh parivar affliate, asserts that the government should desist from indulging in populist measures. Its has warned about pitfalls of farm loan waivers. "The last thing the government should do is resort to farm loan waivers. Rather than being a solution, loan waiver would further deepen the miseries of our farmers. Indeed farmers are in distress and the way the opposition parties for their electoral sake, have raised the issue, the government may deem it to be a political compulsion. But it would be a mistake if it does so," BKS organizational secretary Dinesh Kulkarni told IANS.

Explaining the opposition to the "short-cut" of loan waiver, Kulkarni said such a move only encourages the practice of defaulting on loans contending that only a handful of farmers are benefited. "The Congress governments in Rajasthan, Madhya Pradesh and Chhattisgarh have waived farm loans but has it solved the crisis of the farmers. The only thing that it did is pressuring the banks and making them wary of giving further loans to the farmers," said Kulkarni.

He said that unless there was holistic mechanism to ensure that farmers get the right price for their produce and middlemen are eliminated, the vicious circle of debt will continue. "Loan waiver may halt the vicious debt circle for a short period of time but it won't bring them out of that. Without a mechanism to make agriculture profitable or even allowing the farmers to recover their cost of production, they will be back to being debt-ridden from the next season," said Kulkarni adding that the government must sit with peasant bodies and other stakeholders to chalk out long term plans to resolve the agrarian distress.

Talking about its expectations from the budget, the RSS' labour wing the Bharatiya Mazdoor Sangh (BMS) said the focus should be on expanding the social security net to the unorganized sector including agriculture workers and also advocated against farm loan waiver. While admitting that the government may be inclined towards presenting a populist budget, BMS President C.K. Saji Narayanan said farmers should be incentivized to procure seeds , fertilisers and equipments rather than waiving their loans.

"Our farmers are in distress and indeed need lot of assistance from the government but loan waiver should be the last thing. Waiver as a short term measure is acceptable but then it has its long term effects on the economy which the government should guard against. "The need is put up a mechanism to ensure that farmers gets right price of their produce. They should be given subsidy to purchase seeds, fertilizers and equipments instead of loan waiver," Narayanan said.

A critic of the Modi government's labour and economic policies, Narayanan said the budget should focus on giving relief to the middle class and urorganised sector workers. "This government for most part of its tenure, has functioned like Congress-led UPA. But in the last year or so there has been substantial change in its attitude. However, with elections on the horizon, it may indulge in populist measures. But that doesn't mean it should go for loan waivers.

Narayanan said the government in the budget should look to providing relief to the middle class and the workers in the unorganised sector. "Our major demand is that the income tax exemption limit should be raised to Rs 10 lakh besides that we hope that government will no more neglect our workers especially contract labourers. In addition to hiking contract labour's wages, unorganized sector has to be brought under social security net including agricultural labours," he added.

While Prime Minister Modi and his government have been touting GDP growth as FDI inflow as its major achievements, the Swadeshi Jagaran Manch (SJM), the economic wing of the RSS said, job-less growth was meaningless. "GDP growth or FDI inflow should not be the parameters for development, what matters is how much employment is generated.

"As regards the agrarian crisis, the question is why our farmers are debt-ridden, and answer to that question can never be loan waiver," SJM National Co-Convener Ashwani Mahajan said. He held the "historic neglect" of the agriculture sector by successive governments to be the core issue.

"Besides their persistent failure to even recover their cost of production, the steady rise of prices of farm inputs and farm equipments being under GST, has further pauperised the farmers," he said. He said instead of giving the farmers "alms" in form of loan waiver, the need was concrete policies aimed at reforming and reviving the farm sector and making it economically viable and profitable.

"There are large numbers of seasonal agricultural labourers who are rendered jobless for a large part of the year. The focus should be on rehabilitating them as also come with policies to make agriculture profitable. Mahajan recommended giving major focus on food processing, oil seeds protection, change in crop production, subsidizing farm inputs. "The one thing that must be immediately done is to exempt farm equipments from GST. We sincerely hope the government will use this budget to lay out long term plans to revitalize the economy and resolve the agrarian crisis instead of falling trap to electoral populism," added Mahajan. (Anurag Dey can be contacted at anurag.d@ians.in)

(With inputs from agencies.)