True to its word, the Congress government in Telangana has begun waiving crop loans, with over 11 lakh farmers getting relief of up to Rs 1 lakh on Thursday. Loans of up to Rs 2 lakh will be waived in two more phases by independence day. It is a bold move by Chief Minister A Revanth Reddy to waive loans in such a short span, unlike the previous BRS government that did it in phases between 2014 and 2023.
If the then BRS government shelled out close to Rs 29,000 crore, the exercise now requires Rs 31,000 crore. Before going into the need for frequent crop loan waivers, let us look at the criterion set by the government. It is good that it has excluded taxpayers, All India Service officers, government employees, present and former ministers and other such relatively well-off categories—unlike the BRS, which had declared a waiver for one and all. The purpose of big-ticket loan waivers is to rescue distressed farmers and, logically, the beneficiary must be identified. In that sense, the government guidelines are sensible, notwithstanding barbs from the opposition. There is also a mechanism to address grievances.
However, one needs to ask a pertinent question at this juncture. Why do farmers in the state need a loan waiver despite producing more than before in the last decade and receiving loan waivers twice in that period? The phenomenon is not limited to Telangana. Many states have announced crop loan waivers in the last 15 years costing lakhs of crores of rupees. For Telangana, the prominent reasons are meagre compensation for crop losses that mainly affect marginal farmers and their continuing failure in getting healthy prices, not to speak of the high interest on loans from non-institutional sources.
It is time we found a permanent solution to the crisis in our agriculture sector. Without getting carried away by growth rates, we must look at engaging farmers in crop selection and urgently institute a debt relief commission like Kerala did. It is a tragedy that such an idea was entertained in pre-independent India and we are today looking at short-term solutions. It would not only help farmers but also the state government, as crop loan waivers account for a huge chunk of funds that could otherwise be spent on upgrading our rural infrastructure.