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Today’s Talk on Editorials November 14, 2017- Civils360


Loan Waiver is not the solution- The Hindu

Background: A loan waiver is waiving off the liability of a person or a group who has taken a loan.  India faces a cumulative loan waiver of Rs.3.1 lakh crore or 2.6% of the GDP in 2016-17. A waiver of this scale could pay for the 2017 rural roads budget 16 times over or pay for 443,000 warehouses or increase India’s irrigation potential by 55% more than the achievements of the last 60 years. The states like U.P., Maharashtra have written off loans recently, and it leads to further demands for farm loan waiver from farmers of states like T.N., Gujarat etc.

  • India’s agricultural policy since independence focuses on improving farmers’ access to institutional credit and reduce dependence on informal credit. The government has improved the flow of adequate credit through nationalisation of commercial banks, the establishment of RRB, NABARD etc. Other recent measures include  Agricultural Debt Waiver and Debt Relief Scheme in 2008, the Interest Subvention Scheme in 2010-11, and the Pradhan Mantri Jan-Dhan Yojana in 2014.
  • Actual credit flow has considerably exceeded the target. The result is that the share of institutional credit to the agricultural gross domestic product has increased from 10% in 1999-2000 to nearly 41% in 2015-16.
  • Providing loans to farmers at a subsidised rate of interest or their waiver would accelerate farmers’ welfare remains a question. A recent report of International Food Policy Research Institute reveals that at the national level, 48% of agricultural households do not avail a loan from any source. Among the borrowing households, 36% take credit from informal sources.
  • For those availing formal loan credits,  access to it also tends to enhance farmers’ risk-bearing ability and may induce them to take up risky ventures and investments that could yield higher incomes. A major proportion of farmers remain outside the ambit of a policy of a subsidised rate of interest and as a result, of loan waiver schemes. Thus, it mainly provides relief to the relatively better off and lesser-in-number medium and large farmers.
  • In India, the loan waiver scheme also has another detrimental effect that it blocks the private sector from having productive investment. It produces a crowding out effect which hinders the economic, agricultural growth and productivity.
  • To resolve the issue, following measures can be taken. expanding the formal credit system to include agricultural labourers, marginal and small landholders. the government along with the farmers’ lobby should desist from clamouring for loan waivers as it does not have any long-term benefits.
  • Ministry of Agriculture and Farmers Welfare presented a report that has rightly suggested accelerating investments in agriculture research and technology, irrigation and rural energy, with a concerted focus in the less developed eastern and rain-fed States for a faster increase in crop productivity and rural poverty reduction. This is the right step to take in such a situation.

A hazy policy – The Indian Express

Background: The latest air quality report from World Health Organisation says Delhi is not the world’s most polluted city. It ranks at 11th among 300 cities in terms of fine particulate matter or PM 2.5. The Global Urban Ambient Air Pollution Database released by WHO ranks Delhi in 25th place in terms of PM 10 levels. However, it is not a state to be happy and it does not indicate adequate steps are taken b the government to curb air pollution. This is because four Indian cities have found themselves in the top ten most polluted cities.

  • The Delhi government, the Supreme Court-mandated Environment Pollution Prevention and Control Authority (EPCA) and the National Green Tribunal (NGT) agree that the capital’s ongoing air pollution crisis is an emergency. However, they are pulling in different directions.
  • EPCA enforced a slew of measures, including a ban on diesel generator sets two weeks before Diwali.The EPCA also indicated that it would recommend the odd-even policy of road-rationing if Delhi’s air quality did not improve. The city had already registered “severe” on the Air Quality Index when these measures were recommended.
  • NGT felt that the policy was too watered down to be effective. The green tribunal wanted the exemptions to two-wheelers, women and government servants to go first to make it effective. However, Delhi government showed a lapse of interest to the NGT directive appearing late to the court.
  • The Delhi government told EPCA that the shortage of buses in Delhi makes road-rationing a difficult proposition: The city has less than half the number of buses it requires.
  • Apart from the policy ineffectiveness, other issues that continue to accelerate air pollution in Indias capital are the dust, smoke from construction sites, the smog cased due to agricultural stubbe burning in crop fields of Punjab, Haryana. Also , the climate and locaton of Delhi makes it ever so vulnerable to the pollution.
  • What we require is a strong coordination from the regulatory bodies to have consensus to resolve the problems and to take effective steps t reduce the private vehicles in road by improving the public transportation system.