As the article “A new Chaudhury from Harvard via Rae Bareilly”, (Business Line, March 2) by Mr S. Gurumurthy has clearly brought out, a loan waiver is not going to significantly redress the distress of the farmer. The expert committee had identified the usurious practice of the unorganised (and unregulated) private money-lenders as the main financial yoke on a farmer.

As has been commented upon by many, the timing of the farm loan waiver announcement is politically astute. According to the supporters of the FM, it is an accidental co-incidence. To his detractors, it is motivated. Leaving aside this controversy, I would like to emphasise other aspects.

The Finance Minister must remember that he has to prove diligence and application of mind and cannot say “I’ll tell you when I want to”.

Any person accountable to others has to disclose how he proposes to meet a sudden commitment of this magnitude. The majority government-owned (public sector) banks are likely to be the most affected.

The Central Government (and the RBI) had forced PSBs to give direct loans to farmers as part of its policy. Natural justice demands that write-offs ordered by the government should be to its account.

Partho Datta e-mail

© Copyright 2000 - 2009 The Hindu Business Line