Debt Isn’t Killing India’s Farmers
The causes of rural distress are many and varied, and expensive loan waivers aren’t the answer.
For many farmers, healthcare is a bigger worry than heavy loans.
Photographer: Narinder Nanu/AFP/Getty Images
It’s election season in India and the money is flowing. Governments in many states have begun waiving tens of millions of dollars’ worth of loans to poor farmers in an effort to buy their loyalty. The argument – widely accepted by politicians and journalists, the demographic groups with the least fiscal instinct – is that India’s farmers are buckling under the weight of their debts and rural suicides are spiking dangerously. Rural households are desperate for relief.
The numbers tell a different story. And, given the detrimental impact on credit discipline, not to mention the hole such waivers are going to blow in state budgets, politicians would be wise to rethink their plans.