Playing debt politics

The Congress and AAP still seem to believe that they can win over farmers in Punjab on the promise of a debt waiver. Making use of agrarian distress for votes has been an old, overused practice but now political parties are stretching things to unreasonable, even ludicrous levels. When in 2014 the BJP promised to implement the Swaminathan Commission report of giving farmers 50 per cent profit over input costs, it was something hard to achieve but not impossible. What the Congress and AAP are doing now is unbelievable and undoable.  

Farmers have taken loans from national banks, rural or cooperative banks and arhtiyas. There is no credible, evidence-based number of farmers under debt. A state government has no power over national banks. At best it can take up the responsibility of repaying farmer loans, which is different from a loan waiver and which means a state bailout for better-off farmers because only they have access to banking. Cases of banks auctioning farmer land to recover outstanding dues are rare. Small farmers rely on exploitative arhtiyas for their emergency financial needs. It is this politically well-connected section that humiliates farmers, often with police complicity, and forcibly takes over the lands of defaulters. How can the state waive loans taken from arhtiyas when there are no legally valid records of borrowings? 

Pulling agriculture out of stagnation requires a well thought-out plan. No political leader has a case to present. None talks about boosting agricultural research, building a scientific storage and supply chain to cut waste of agricultural produce and improving marketing, soil health and water resources. It is politically more rewarding to focus on farmer suicides than logically argue ways to help needy farmers. With the state treasury near empty and the debt load sky high, running a government itself will be a challenge. Politics of appeasement has bankrupted Punjab and all are in it together — the giver and the recipient of benefits. You either borrow more or hike taxes to fund freebies. The Centre is unlikely to bail out the state. Neither the Congress nor AAP is willing to say it will raise taxes.