LOAN-WAIVER: A POLICY TO PROMOTE FISCAL DISHONESTY & CORRUPTION
MP Government has announced waiver of farm-loan up to a maximum of Rs 2 lacs as on 31.3.2018 per registered farmer.
This implies if on 31.3.2018, one farmer 'A' had an outstanding loan, amounting Rs 1 lac, then the waiver benefit he would get is of Rs. 1 lac.
Again if another farmer 'B' had an outstanding loan, amounting Rs 2 lacs, then the waiver benefit he would get is of Rs. 2 lacs.
Further, if another farmer 'C' had an outstanding loan amounting Rs 0 i.e. no outstanding dues, then the waiver benefit he would get is of Rs. 0 i.e. he won’t get any benefit from this waiver being declared.
This means, more outstanding, more benefit.
Now suppose, this farmer 'C' also had an outstanding loan of Rs 2 lacs or more till 29.03.2018 on which date he repaid all his loan out of his hard-earned money & thus fulfilling his natural duty as an honest citizen & borrower. This waiver scheme proved him & his honesty to be his folly because had he not repaid his loan on 29.03.2018, then he could also have had an outstanding loan of RS. 2 lacs on 31.03.2018 & thus could have enjoyed the benefit of the waiver.
Hence, the loan waiver scheme may have come as a boon for farmer 'A' or farmer 'B', i.e. the defaulters, but simultaneously has come as a curse in disguise for farmer 'C' & thus proving that in this country, honesty is the other name of foolishness.
Can we expect that this farmer 'C' would ever in future feel like repaying his loans? Isn’t the waiver scheme a step towards making the environment more corrupt & more dishonest? Won’t it encourage the honest farmers to give up their honesty at the face of utter poverty that they have to tackle equally with their fellow defaulting farmer brothers?
Can the Government of a country promote this kind of fiscal indiscipline & fiscal dishonesty amongst its citizens by waiving loans? If it does, then that Government is promoting anarchy. That’s exactly what had been done till 2014 by Congress. They promoted anarchy, weakened the citizens morale, encouraged them to be habitually dishonest by such policies. The policies & schemes of Congress Government were such that all those people who wanted to keep their head high & tried to live with dignity, had been strategically demotivated.
Congress wants dishonest & spineless countrymen just to create an ecosystem of corruption in their favour. 'Be corrupt & Remain tied up with us' appears to be their policy.
The moment Congress is back in Madhyapradesh, they are back with the same demoralizing principle of loan-waiver. And Rahul Gandhi stated that if Congress comes back in 2019, they’ll waive off all farm-loans. This implies, they’ll also reinstate back the policy of giving huge loans to the so called industrialists like Nirav Modi, Vijay Mallya etc to increase the NPA burdens of the banks. That means the same anarchy is going to come back which Modi'ji is strategically streamlining with strong laws & policies for last 4 years.
Instead, the Government could have announced a grant of Rs 2 lacs flat to all the registered farmers of the State but disbursed only the balance amount after deducting the outstanding loan amount in the account of the each farmer.
This policy, though a bit more expensive than loan-waiver, won't deter intention of loan repayment.
In that case, the farmer 'A' of our above example would not only have got his outstanding loan of Rs. 1 lac waived but also have received an additional amount of Rs. 1 lac as Government-grant in his account.
The farmer B would also have got his outstanding loan paid off but wouldn’t have retained any more money in his account.
However, the farmer C, who had no outstanding loan in his account, would have got the whole amount of Rs.2 lac as Government-grant in his account.
In this situation, all the farmers could have enjoyed equal benefit of Rs 2 lacs but with difference only in tangibility.
Such a scheme would not only have benefitted all the farmers but also could have been proven to be more rewarding to the honest & compliant farmers, eg Farmer 'C', among them.
Such a scheme would also motivate the loanee to pay off his loan as in that case, he would gain the whole amount that the Govt. suddenly decides to disburse as 'GRANT'.
This implies if on 31.3.2018, one farmer 'A' had an outstanding loan, amounting Rs 1 lac, then the waiver benefit he would get is of Rs. 1 lac.
Again if another farmer 'B' had an outstanding loan, amounting Rs 2 lacs, then the waiver benefit he would get is of Rs. 2 lacs.
Further, if another farmer 'C' had an outstanding loan amounting Rs 0 i.e. no outstanding dues, then the waiver benefit he would get is of Rs. 0 i.e. he won’t get any benefit from this waiver being declared.
This means, more outstanding, more benefit.
Now suppose, this farmer 'C' also had an outstanding loan of Rs 2 lacs or more till 29.03.2018 on which date he repaid all his loan out of his hard-earned money & thus fulfilling his natural duty as an honest citizen & borrower. This waiver scheme proved him & his honesty to be his folly because had he not repaid his loan on 29.03.2018, then he could also have had an outstanding loan of RS. 2 lacs on 31.03.2018 & thus could have enjoyed the benefit of the waiver.
Hence, the loan waiver scheme may have come as a boon for farmer 'A' or farmer 'B', i.e. the defaulters, but simultaneously has come as a curse in disguise for farmer 'C' & thus proving that in this country, honesty is the other name of foolishness.
Can we expect that this farmer 'C' would ever in future feel like repaying his loans? Isn’t the waiver scheme a step towards making the environment more corrupt & more dishonest? Won’t it encourage the honest farmers to give up their honesty at the face of utter poverty that they have to tackle equally with their fellow defaulting farmer brothers?
Can the Government of a country promote this kind of fiscal indiscipline & fiscal dishonesty amongst its citizens by waiving loans? If it does, then that Government is promoting anarchy. That’s exactly what had been done till 2014 by Congress. They promoted anarchy, weakened the citizens morale, encouraged them to be habitually dishonest by such policies. The policies & schemes of Congress Government were such that all those people who wanted to keep their head high & tried to live with dignity, had been strategically demotivated.
Congress wants dishonest & spineless countrymen just to create an ecosystem of corruption in their favour. 'Be corrupt & Remain tied up with us' appears to be their policy.
The moment Congress is back in Madhyapradesh, they are back with the same demoralizing principle of loan-waiver. And Rahul Gandhi stated that if Congress comes back in 2019, they’ll waive off all farm-loans. This implies, they’ll also reinstate back the policy of giving huge loans to the so called industrialists like Nirav Modi, Vijay Mallya etc to increase the NPA burdens of the banks. That means the same anarchy is going to come back which Modi'ji is strategically streamlining with strong laws & policies for last 4 years.
Instead, the Government could have announced a grant of Rs 2 lacs flat to all the registered farmers of the State but disbursed only the balance amount after deducting the outstanding loan amount in the account of the each farmer.
This policy, though a bit more expensive than loan-waiver, won't deter intention of loan repayment.
In that case, the farmer 'A' of our above example would not only have got his outstanding loan of Rs. 1 lac waived but also have received an additional amount of Rs. 1 lac as Government-grant in his account.
The farmer B would also have got his outstanding loan paid off but wouldn’t have retained any more money in his account.
However, the farmer C, who had no outstanding loan in his account, would have got the whole amount of Rs.2 lac as Government-grant in his account.
In this situation, all the farmers could have enjoyed equal benefit of Rs 2 lacs but with difference only in tangibility.
Such a scheme would not only have benefitted all the farmers but also could have been proven to be more rewarding to the honest & compliant farmers, eg Farmer 'C', among them.
Such a scheme would also motivate the loanee to pay off his loan as in that case, he would gain the whole amount that the Govt. suddenly decides to disburse as 'GRANT'.
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