Why Rahul Gandhi's promise of a UP farmer loan waiver is cause for alarm
At the end of his pan-Uttar Pradesh Kisan Yatra in New Delhi, Rahul Gandhi blabbered something that overturned the real purpose of his 'Khaat par charcha'.
The Congress vice-president hit an own goal with his 'khoon ki dalali' remark. And while he copes with condemnation from all quarters, few people have noticed a bigger issue that's worth the same treatment.
That purely political statement is unlikely to make much difference on the ground. However, Rahul and the Congress party's politics might well stand in the way of the country's economic health.
The problem with his promise
This is the time when India's banking sector faces a serious bad loans crisis. A worried government is desperately seeking suggestions from a committee headed by former Comptroller and Auditor General, Vinod Rai.
But Rahul Gandhi appears to be sowing the seeds of further trouble for public sector banks on the political turf of Uttar Pradesh. His tall promises during the Kisan Yatra, if fulfilled, could add to the bad loans of government banks by at least Rs 1 lakh crore.
Throughout his yatra, from Deoria to Delhi, Rahul never once let his attention wander away from farmers. At every gathering, he accused the government of failing to recover money from big defaulters, while dealing strictly with farmers under debt. He went on to promise to farmers that the Congress would write off all their loans within 10 days of coming to power.
Is it a realistic proposition?
One cannot help but ask: is this a realistic proposition? Every political animal in UP knows that the Congress is going to finish no better than a poor fourth in the forthcoming Assemblyelections. The improvement in its tally, if at all there is one, is only likely to be marginal.
All that the Kisan Yatra and 'Khaat par charcha' can do is generate a few headlines in the media.
But, let's accept, for argument's sake, that there is a miracle and the Congress manages to be a part of the ruling dispensation. Does a state government have the right to dole out loan waivers? The most likely answer is, no.
It is clear that the Congress or Rahul Gandhi, as its face and vice-president, is going to face the pressure of fulfilling this promise. The voters of UP will make a decision based on several other pressing issues, and the next battle for Delhi is still not around the corner. Yet, Rahul Gandhi and his party are promising something they cannot deliver. This could prepare the ground for further deterioration of the health of public sector banks.
Rahul had a precedent to cite during his interactions with farmers. He reminded them of the 2008 General Budget, where the UPA government had announced a Rs 60,000-crore loan waiver for farmers.
However, the benevolence took its toll on the economy. It was the beginning of the non-performing assets crisis for public sector banks. Yet, Rahul is playing the same card again.
Political power play
In other words, he is trying to end the public's trust in Narendra Modi, instead of convincing the people about his own vision.
According to Rahul, the Modi government has waived off loans worth over Rs 1 lakh crore for the corporate sector. He insists a similar benefit must also be extended to the farmers.
Portraying himself as a pro-farmer leader, in contrast to the 'business-friendly' Modi, was a consistent theme during his 26-day long yatra.
Rahul has also dug a hole for public sector banks by collecting 'maang patras' or demand letters from 75 lakh farmers. The party aims to reach out to at least 2 crore farmers with this campaign. The letters ask for writing off their debts. The party keeps a copy of the letter while the farmer keeps the other.
This might well be a signal that the Congress could raise the issue in the upcoming Parliamentary session. The party wants to force the government into submission on this issue, and winning credit for getting farmer loans waived off. In case the government does not relent, it could always go to the electorate claiming Modi is anti-farmer.
There is little chance that the government is going to yield to the pressure. Especially when it is working on a scheme to double the income of farmers until 2022.
Nevertheless, the Congress vice-president has set the stage for a situation where farmer groups are likely to work on the same strategy. The demand letters collected by the Congress seek a waiver for the average loan, Rs 1 lakh. But, assuming the average loan to be just Rs 50,000 per farmer, and multiplying it by the number of demand letters, the figure comes out to be a whopping Rs 1 lakh crore.
Rahul should be taken to task more for this 'maang patra' campaign than for his controversial statement. He is playing clever politics to give his party a chance in the UP polls. He has the party's past record to boost his assurances.
But, it would take a big miracle for him to be in a position to walk the talk anytime soon.
Edited by Shreyas Sharma
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