India’s Most Powerful Banker Warns of Loan Waiver Hazards

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Lending in India can get political. Take the events of 2008, when Finance Minister Palaniappan Chidambaram instituted a program that ultimately forgave 710 billion rupees ($14.6 billion) in loans to more than 40 million farmers. The Congress Party politician said he was rescuing small farms that suffered from too much debt. Critics objected that the government was pandering to the rural poor ahead of national elections in 2009.

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