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Why farm loan waiver is bad?
Loan waivers can also negatively impact the credit flow because it creates distortions in the credit market since repeated waivers encourage default among the farmers. It also increases the NPAs (Non-Performing Assets) of banks. Thus in the expectation of waiver, those farmers who can afford to pay, will not pay.
Is loan waiver to farmers justified?
Extent of waivers Farm loans are justified “on social welfare grounds with the Government citing urban-rural divide in growth, social unrest and farmers’ suicides as the justifications for the national ADWDRS [Agricultural Debt Waiver and Debt Relief Scheme, 2008] programme,” the report said.
Is farm loan waiver good for the country?
If there isn’t any rains or insufficient market demand, farmers are unable to pay the loan amount or interest. When there is a continuous monsoon failure, farmers are trapped, with no other option, the farmer are forced to commit suicides. So, farm loans waiver is a good step towards curbing the crisis.
What does a waiver do?
A waiver is a demonstration, usually in written form, of a party’s intent to relinquish a legal right or claim. The key point to note is that the relinquishment is voluntary, and can apply to a variety of legal situations. Essentially, a waiver removes a real or potential liability for the other party in the agreement.
How will farm loan waivers impact the Indian economy?
If poll-bound states—including Gujarat, Karnataka, Rajasthan and Madhya Pradesh— too announce farm debt waivers and extend it to one-third of farm loans in their respective states, then the aggregate amount of farm debt waivers before the 2019 elections would balloon to Rs2 trillion, or 1.3\% of India’s GDP.
What is the meaning of waived off?
b : to refrain from pressing or enforcing (something, such as a claim or rule) : forgo waive the fee. 2 : to put off from immediate consideration : postpone. 3 [influenced by wave entry 1] : to dismiss with or as if with a wave of the hand waived the problem aside.