Farmers loan waiver: is it a boon or bane?

Loan waivers neither help the farmers nor improve the agrarian economy. Most of the farmers in distress fall outside the universe of beneficiaries entitled for institutional finance and as such the write-offs do not benefit the largest segment of poor farmers. Loan waivers actually become a drag on the economy and further curtail the availability of credit to the small and marginal farmers, who are direly in need of help. Appeasement schemes targetted at the more influential segments, in fact, raise the cost of borrowing for the poorer lot. It is estimated that farm loan waivers benefit no more than 10-15 percent of the farmers. [more]

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