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Nation Current Affairs 31 Mar 2019 Hyped AP waiver sop ...

Hyped AP waiver sop doesn’t help farmers

Published Mar 31, 2019, 12:59 am IST
Updated Mar 31, 2019, 12:59 am IST
Interest component to be paid increased manifold.
The AP government claimed that the waiver had left the farmers with vastly reduced debt burden with the banks.
 The AP government claimed that the waiver had left the farmers with vastly reduced debt burden with the banks.

Hyderabad: The debt waiver scheme implemented by the AP government benefited a few farmers and burdened a majority of them, according to a study in the neighbouring state.

The reason was the hype created around the scheme and the manner in which the loans were waived.


A case study in Marthadu in Anantapur district by Prof. K.V. Ramana Reddy revealed that due to the inordinate delay in the implementation of the scheme, the interest component to be paid by the farmers from their own resources increased manifold.

The study said that in the absence of a waiver scheme, the farmers might have repaid the loan at an interest rate of four per cent.

With the announcement of the debt waiver, the farmers did not pay the interest in the expectation that the entire outstanding would be waived.

Due to the delay and stipulations laid down by the state government, the interest rate that the farmers ultimately paid worked out to about 16 per cent.

The AP government claimed that the waiver had left the farmers with vastly reduced debt burden with the banks.

The Opposition disagreed and said the benefits accrued to the farmers through the debt waiver was not sufficient even to pay the interest for the outstanding debt of `82,000 crore as on March 31, 2014.

Against this backdrop, Prof. Ramana Reddy along with some researchers attempted to collect data in Marthadu of Garladinne mandal in Anantapur district for a case study. Marthadu is a relatively big village and grow high-value crops.

The village has 1,253 families who had taken 2,792 loans with an outstanding amount `14.82 crore as on December 31, 2013. The study covered 945 farmer families (75 per cent) of the farmers who had 2,324 loans.

The share of debt waiver announced by the government was 40 per cent or `5.52 crore of outstanding.

The study found that the number of loans sanctioned by commercial banks was increasing every year but jumped to 1,100 in 2013. This was because of the hype created by Telugu Desam leaders that if the party came to power all the loans would be waived without conditions.

The study revealed on the whole indebtedness increased in the case of 45 per cent of farmers in the village, and in case of 13 per cent indebtedness remained more or less the same.

This 58 per cent of farmers suffered due to the debt waiver scheme and only 14 per cent of farmers benefited with 50 per cent to 72 per cent of total outstanding waived. Three per cent of farmers benefited to the extent of 40 per cent waiver and 13 per cent had 22 to 28 per cent of the outstanding waived.

The remaining 18 per cent farmers got very less benefit.

Location: India, Telangana, Hyderabad