Jaipur: Rajasthan chief minister Vasundhara Raje today announced one-time loan waiver of up to Rs 50,000 for small and marginal farmers in the state, which would cost Rs 8,000 crore to the exchequer.
Presenting the state budget in the Assembly, Raje also announced setting up a farmer loan relief commission where farmers can approach and present their side for getting relief on merit basis.
As Raje, who also holds finance portfolio, announced the loan waiver, opposition Congress members led by the leader of opposition Rameshwar Dudi created uproar in the house.
They said it was betrayal with farmers and the complete loan should be waived.
Raje informed the house that the decision of loan waiver up to Rs 50,000 for small and marginal farmers will cost Rs 8,000 crore to the exchequer.
The chief minister also announced free travel for people above 80 years of age and one attendee on the half fare in the state roadways buses.
Hike in honorarium to Anganwadi workers, underpass from the Ramniwas garden to Delhi road for a better traffic management, biogas plants in cow shelters were among other announcements.
Loan waivers do provide some relief to farmers in such situations, but there are debates about the long-term effectiveness of the measure. Critics demand to make agriculture sustainable by reducing inefficiencies, increasing income, reducing costs and providing protection through insurance schemes. They point out that farm loan waivers are at best a temporary solution and entail a moral hazard — even those who can afford to pay may not, in the expectation of a waiver.
Such measures can erode credit discipline and may make banks wary of lending to farmers in the future. It also makes a sharp dent in the finances of the government that finances the write-off. But farmers can decide the fortunes of political parties, and politicians are wary of antagonising them.