Finance minister, P Chidambaram on feb 2008 announced agriculture loan waivers to the tune of Rs 60,000 crore for debt-trapped farmers.
India's fiscal deficit soared by 34 per cent to Rs 3.5 lakh crore in the first ten months of the financial year 2009 against Rs 2.62 lakh crore a year ago, mainly on account of the stimulus measures taken by the government to prop up the economy hit by the global financial crisis.
So nearly 23% of fiscal deficit was created due to this waiver, i.e 60000 cr out of 2.63 crores, add interest on that.So real cause behind inflation is loan waiver by central government to woo voters.
The relief measures announced, did not have the desired effect as reports of suicides have continued from even after the implementation of the debt relief package.This is largely because private moneylenders, who supplement the loans of even those farmers who are covered under the institutional credit system, have continued to harass them for the settlement of their dues. What farmers need for their survival is income, and not so much debt relief In simple words, the country needs agricultural renewal and productivity improvement.
Hence country gained nothing from loan waiver except price rise.....and country has to bear its effects for several coming years....
