Farm loan waiver not a solution, says Niti Aayog

New Delhi: A day after Congress chief Rahul Gandhi said that the opposition will not allow Prime Minister Narendra Modi to sleep in peace till the government waives off farm loans, the Niti Aayog said that such a move helps only a fraction of farmers and is no solution to mitigate agrarian distress.

“Farm loan waiver is not a solution to farm sector distress. It is not a solution but is palliative,” Niti Aayog Vice Chairman Rajiv Kumar said at a press conference after the re-lease of its ‘Strategy for N-ew India @ 75’ document.

Niti Aayog Member and agriculture policy expert Ramesh Chand also echoed Mr Kumar’s opinion, saying the biggest problem with loan waiver is that it will benefit only a small fraction of farmers. “In poorer states, only 10-15 per cent of farmers are benefited from loan waiver as few number of farmers get institutional loans in such states. In many states, not even 25 per cent of farmers avail institutional credit,” Mr Chand pointed out.

Mr Chand noted that when you have this kind of variations in states in terms of farmers’ access to institutional credit, it is not worth spending so much money on farm loan waivers. “Even CAG repo-rt says that farm loan w-aivers does not help. Loan waivers is no solution to address distress in farm sector,” he said.

Both the officials said that the government think tank will suggest to the ministry of agriculture to link allocations to states to reform measures undertaken by them in the farm sector.

Replying to a query on GST, Mr Kumar said the average rate will gravitate towards 15 per cent with increased resources and widening of the tax base.

To a question on job creation, the Niti Aayog vice chairman said, “We are concerned with the employment situation. In fact, I am one of those economists who has said our policy targets could well be in terms of employment maximisation and growth will come out of that.”