Why Is It That Corporates Never Protest On Streets To Seek Loan Waivers?

Farmers protested in Madhya Pradesh & Maharashtra by cutting off supplies of milk and vegetables to cities.

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Just think about it. Why is that to seek loan waiver, farmers have to take to streets, block the highways, hold protest marches, face tear gas and sometime face bullets? Why is that I have never seen the corporate bigwigs sitting at a dharna at Jantar Mantar in New Delhi demanding loan waiver?

After the agitation in Madhya Pradesh and Maharashtra, which left sic farmers dead in police farming, Maharashtra has finally agreed to waive Rs 30,500-crore of bad loans of farmers. Earlier, Uttar Pradesh had announced striking out Rs 36, 359-crore of unpaid loans of small and marginal farmers. Farmers’ protests are now spreading to Punjab, Haryana, Rajasthan, Madhya Pradesh and Chhattisgarh. Such is the deplorable condition of farmers that at a farmers protest in Moga in Punjab, one farmer committed suicide unable to wait to live with the promise of a loan waiver.

Already dharnas have begun with farmers demanding debt waiver. Farmer unions have also given a call for three-hour rail roko and rasta roko agitation throughout the northern regions on June 16, demanding farm loan waiver. But why is that farmers have to launch a series of protests to highlight the plight and suffering of the farming community to drive home the point that farmers desperately need loan waivers? Don’t the policy makers already know that farmers are dying all across the country? Agriculture is in an emergency situation.

In the past 21 years, more than 3.18 lakh farmers have committed suicide. Every 41 minutes, one farmer ends his life somewhere in the country. Majority of these deaths are because farmers are unable to pay back loans. They are in reality buried under piles of credit taken from multiple sources. The Union Minister of State for Agriculture in November 2016 had acknowledged in Parliament that farmers are reeling under outstanding debt of Rs 12.60 lakh crore every year, so writing-off of farm loans not only makes good politics but also good economics.

But before we see how the loan waiver policy discriminates farmers, I fail to understand why do farmers have to undergo all the trouble while the corporate quietly get the loan waiver? They don’t even have to step out of their cars what to talk of organizing a protest. The question that needs to be asked is why do industrialists get a preferential treatment whereas farmers have to take to streets and face bullets? After all, both farmers as well as the industrialists draw loans from the same bank, and I see no reason why the banks should be treating industry defaulters with kid gloves and put the farmers to undergo the trouble of protesting on the streets?

Soon after Yogi Adityanath announced the farm loan waiver in Uttar Pradesh, the State Bank of India chairperson Arundhati Bhattacharya remarked that farm loan waiver leaders to disruption of credit discipline. A few weeks later, she wrote a letter to the Finance Minister pleading to provide a bail out to the telecom industry which is reeling under an ‘unsustainable’ stressed loan of Rs 4.85-lakh crore. What I fail to understand is that why did the SBI chairperson seek a bailout package on behalf of the defaulting telecom companies? Why couldn’t the top honchos of telecom companies be made to sit on a dharna in New Delhi like the way the farmers normally do to seek a write-off?

This is how the banking system discriminates the poor borrowers, and frowns when farmers use the same clean-up mechanism that has been reserved for corporate balance sheet.

The discrimination doesn’t end here. While the Finance Minister Arun Jaitley has made it clear that the states will have to find resources to write-off farm loans, an inter-ministerial panel led by a senior official in the telecom ministry has been constituted to examine the possibility of bailout for debt-ridden telecom companies. Earlier, the Business Standard (Mar 23) had reported that the Prime Minister’s office (PMO) was likely to step in to resolve steel companies bad debt issue. Accordingly, the PMO, along with the Finance Ministry, was working on a fresh package for top steel companies and also for the top 40 accounts that were under stress. The total debt of these companies stands at Rs 1.5-lakh crore.

The bias against the farm sector does not end here. Ever since Maharashtra announced the farm loan waiver I find many TV channels are devoting time to misguide the people by claiming that the farm loan waiver will hit the national economy, raise inflation, raise home loan EMIs etc. Farmers are being deliberately painted as culprits whereas these points are never highlighted when corporate get the bail out. In fact, the corporate bailout is projected as essential for economic growth whereas farm loan waiver is blamed for fiscal slippage.

According to a Bank of America Merrill Lynch report, roughly Rs 2.57 lakh crore of farmers’ loans, or 2 per cent of India’s GDP, is expected to be waived-off in the run-up to the 2019 general elections. But again, Merrill Lynch never told us how the humongous write-off of corporate loans affects the economy. I agree Rs 2.57 lakh crore of farm loan waiver in the next two years is a big bailout package for farmers but why doesn’t Merrill Lynch ever talk about the proposed Rs 4-lakh crore bailout to the telecom industry? By painting the farmers in bad light, Merrill Lynch is essentially trying to defend the huge corporate defaults that are routinely undertaken.

This is how the banks play the game. This is not only a moral hazard but is completely unethical. The rules of the banking system should not discriminate against the poor.

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