Mr Chidambaram and his cohorts stoutly defend loan waiver of Rs 60,000 crore. They are vaguely right but precisely wrong. It is true that amount involved per farmer is tiny as compared to subsidy given by the Governments of US and EU countries to their farmers. But the issue is financial discipline and prudential norms of banks. A massive waiver of this size will certainly affect the regional rural banks, which are generally weak, co-operative societies and banks.

In 1938, the Royal Commission on agriculture made a cryptic comment that Indian farmer is born in debt, lives in debt and dies in debt. Much later, Mr Amartya Sen, Nobel Laureate in economics, had said that farming in India, particularly small farming, is unviable. Hence loan waivers were done many times in the past and will continue in future also. The reason is that a durable and viable solution is complex, involves painfully tedious process and demands committed officials and disciplined farmers.