In Cong-JD-S ruled Karnataka, 25 farmers committed suicide every month, says report

Congress led by Rahul Gandhi has now thrown a challenge to the BJP by farm loan waivers in states like Madhya Pradesh where it has just won polls even as economists and experts warn against such a populist measure.  

Amid the boasting by the new Congress governments on how immediately after assuming power they waived farm loans in Madhya Pradesh, Rajasthan and Chhattisgarh, facts emerged that 25 farmers committed suicide every month in Karnataka, where also the alliance government of Congress had waived farm loans.

Karnataka is ruled by the Congress-Janata Dal (Secular) alliance.

According to a report in The Hindu, 2,909 farmers committed suicide across Karnataka in last 10 years. As per the State Agriculture Department, reported by The Hindu, 25 farmers committed suicide every month due to the unviable conditions of farming.

According to the Economic Survey, quoted by the Hindu, "the sector recorded growth of 12.4 per cent of Gross State Domestic Product in 2007-08, 2.3 per cent in 2008-09, 3.6 per cent in 2009-10, 13.3 per cent in 2011-11 and – (minus) 2.9 per cent in 2011-12".

Following the Congress' footsteps, the BJP government in Assam and Gujarat have also waived farm loans to stay in the competition.

However, economists denounced such political moves, adopted primarily by the Congress. Former RBI governor Raghuram Rajan has already warned against such a measure.

"Loan waivers, as RBI has repeatedly argued, vitiate the credit culture, and stress the budgets of the waiving state or central government. They are poorly targeted, and eventually reduce the flow of credit. Agriculture needs serious attention, but not through loan waivers. An all-party agreement to this effect would be in the nation’s interest," he said recently.

United Bank of India's managing director Ashok Kumar Pradhan has been quoted by Economic Times, "It is a deadly poison. It’s a wrong way of addressing the real issue."

Mrutyunjay Mahapatra, managing director at Syndicate Bank, has been quoted by the same media outlet, "Undoubtedly, farmers’ expectations of loan waivers are going up."

"It is not good for the country’s credit culture.”

In 2009, the Congress-led United Progressive Alliance (UPA) government waived farm loans which earned them a second term under Prime Minister Manmohan Singh.