Tag Archives: rural loan waiver

Rural Loan waiver: Political expediency at the cost of fiscal consolidation

Lalit Shastri

Even though farm loan waiver hampers fiscal consolidation it is considered politically expedient and touted as an essential solution to untimely deaths and suicides by farmers in India.
After the National Front government, headed by V.P. Singh, had implemented a debt relief scheme in 1990, the UPA-I headed by Manmohan Singh implemented the agricultural debt waiver Scheme just before the 2009 Parliamentary election. In 2014, Andhra Pradesh and Telangana implemented their loan waiver schemes and two years later Tamil Nadu also followed suit.
In 2017, BJP governments in Maharashtra and UP, as well as the Congress Government in Punjab took the same road and went for the populist loan waiver scheme. The same year, even the Congress Government in Karnataka had announced the waiver of crop loans extended by cooperative institutions.
Earlier, In the run up for the 1990 Assembly election in Madhya Pradesh, the BJP had announced that once they come to power, all rural loans shall be waived. The BJP had done this showing zero regard to the fact that no government’s financial policy recognises or rewards a defaulter. Populism brought its dividends and the BJP came to power in MP riding on the crest of popularity due to the loan waiver plank in 1990.
During electioneering for the just concluded Madhya Pradesh Assembly election, the Congress party took the same position and capped its election campaign with the rural loan waiver promise. Kamal Nath was prompt in signing the order for waiving farmers’ loans up to Rs 2 lakh immediately after being sworn-in as chief Minister.
Addressing a public rally at Ghazipur in the Varanasi division of Uttar Pradesh earlier this week, Prime Minister Narendra Modi trained his gun at the Congress party and said that the “lollipop company” has repeatedly cheated the people on the farmer’s loan waiver promise.
Obviously keeping the forthcoming Parliamentary elections in focus, Modi said on this occasion that populist announcements cannot provide a permanent solution to problems confronting the nation. After the change of governments in these states, black marketers are everywhere and people are waiting in queues for fertiliser and urea.
Modi further said that the Congress party, after “stealing votes” in Karnataka, has given the benefit of rural loan waiver to only 800 people and those who have not got the benefit of the loan waiver scheme are now being haunted by the police for recovery of dues.
The Prime Minister’s pointer that only 800 have benefited from Karnataka Government’s rural loan waiver scheme was not backed with corroborative evidence.
The Prime Minister’s ranting at Ghazipur notwithstanding, the fact remains that the major political parties across the board have used the loan waiver plank to remain riveted to power.
The BJP had promised in 2014 that if NDA came to power it would give MSP (Minimum Support Price) to the farmers by adding 50 per cent profit into the input cost. While the follow up on this remains a far cry nothing significant has been achieved when it comes to regulating the farmers’ liabilities by controlling input costs, maintaining regular power supply and creating the infrastructure, and a robust network of warehouses, temperature controlled supply chain, and the right kind of system for providing proper extension services to the agriculture sector.

Sunderlal Patwa: Politician to the core who defied the mundane

Lalit Shastri


sunderlal-patwaVeteran Bharatiya Janata Party (BJP) leader and former Madhya Pradesh chief minister Sunderlal Patwa passed away this morning after suffering a heart attack. He was 92.

The Madhya Pradesh government has announced a 3-day state mourning as a mark of respect to the departed leader.


When Janata Party had come to power in Madhya Pradesh in June 1977 after the Emergency imposed by Indira Gandhi between 1975 and 1977, Kailash Joshi was sworn-in as Chief Minister and his term lasted barely 7-months as he was replaced by VK Saklecha, who ruled for more than two years from January 1978 to January 1980.

Sunderlal Patwa succeded Saklecha but remained chief minister for only 29 days. His tenure was cut short as his government was dismissed and President’s Rule was imposed in February 1980 although he commanded majority. When elections for the State Assembly were held in June 1980, Congress came to power and Arjun Singh became the chief minister and completed his five-year term in office.

In the 1990 Assembly election, the BJP led by Sunderlal Patwa swept to power riding the crest of popularity due to the pre-election promise of “Rin-Mukti” (farmers’ loan waiver).

Here are clippings of news items by the author published on 3-consecutive days in July 1989 exposing the impractical side and futility of rural loan waiver

In the run up for the 1990 election, the State BJP unit led by Patwa had announced from rooftops that once they came to power, all rural loans shall be waived. This was done without explaining what they meant by “Rin Mukti” or loan waiver and what would be the tune of debt that they hoped to exempt and also from where they were going to mobilise resources to meet this goal. The BJP had done this showing zero regard to the fact that no government’s financial policy recognises or rewards a defaulter.
Patwa’s second term, though it lasted slightly more than 1000 days, also ended abruptly in December 1992 when his government was dismissed and President’s Rule was imposed in Madhya Pradesh in the wake of the riots that followed in Bhopal and few other cities after the demolition of the disputed Babri Masjid structure on 6 December that year.

Patwa presided over a democratically elected government that was dismissed due to the failure on its part to prevent post-Ayodhya riots from spreading in Madhya Pradesh, whereas the top officials, including the then State Chief Secretary and Director General of Police, who were monitoring the riot situation from the Control Room in the State capital and briefing the media on a day-to-day basis along with the Chief Minister at the State secretarat kept rising the ladders of success in their respective careers. Notwisthstanding the fact that both these top offcials were removed promptly by the then Governor on imposition of President’s Rule to allow fair Inquiry into the causes and acts of omission and commision leading to the flare up of the situation, the fact remains that on the one side Patwa lost his job as chief minister and on the other the top cop in quetion was elevated to the post of Director General of Border Security Force and the axed chief secretary who also went on deputation to the Centre was later appointed as chairperson of the Public Enterprises Selection Board [P.E.S.B], which is a high powered body constituted by Government of India for evovling a sound managerial policy for the Central Public Sector Enterprises and, in particular, to advise Government on appointments to their top management posts.

It is not the least surprising that the BJP had to pay a heavy price and it lost the 1993 State Assembly election. This happened since the majority of voters had refused to get polarised as hundreds had perished in the post-Ayodhya riots while the police under the Patwa regime had mostly abdicated it’s role. I have been a witness to police officers turning a blind and leaving the scene while rioters torched shops and indulged in an orgy of violence in old Bhopal streets.

Any one who has watched Assembly debates with Patwa as leader of the House or as Opposition leader, would recall his punchy jibes, humour and rustic replies that left all speechless. One recalls – on a particular occasion when the members from the Opposition benches had tried to pin him down on his unfulfilled promises, he had remarked with a nonchalant demeanour “मैने गंगा जल हात में लेकर शपथ नहीं ली थी”” (I did not announce this by taking oath while holding the sacred water of the Ganges in my hand).

Patwa had tremendous faith in his own popularity both within the party and outside. It was backed by his long years as a party worker with the erstwhile Jan Sangh and then as a legislator and parliamentarian and a veteran BJP leader who had played a key role in laying the foundation of BJP in Madhya Prdesh. A negative reporting here or a negative reporting there never bothered him even an iota.

Hailing from Mandsaur in western Madhya Pradesh Patwa had made Bhojpur, near Bhopal, his Assembly constituency. He had also defeated Congress stalwart Kamal Nath on his home turf in Chhindwara in 1998 and had also represented Hoshangabad in Parliament when he won that seat in 1999.

Political Career

  • 1957-67, 1977–97 and 1998 – Member, Madhya Pradesh Legislative Assembly (three terms)
  • 1957-67 – Chief Whip, Opposition Party, Madhya Pradesh Legislative Assembly
    1975 – General Secretary, Jana Sangh, Madhya Pradesh
  • 1977 – Member, Working Committee, Janata Party
  • Jan. 1980 – Feb 1980, March 1990 – December 1992 – Chief Minister, Madhya Pradesh (twice)
  • 1980-85 – Leader of Opposition, Madhya Pradesh Legislative Assembly; Chairman, Public Accounts Committee, Madhya Pradesh Legislative Assembly
  • 1986 – President, B.J.P., Madhya Pradesh; Member, General Purposes Committee, Madhya Pradesh Legislative Assembly
  • 1997 – Elected to 11th Lok Sabha
  • 1999 – Re-elected to 13th Lok Sabha (2nd term)
  • 13 Oct. 1999 – 30 Sept. 2000 – Union Cabinet Minister, Rural Development
  • 30 Sept 2000–7 Nov. 2000 – Union Cabinet Minister, Chemicals and Fertilizers
  • 7 Nov. 2000 – 1 Sept. 2001 – Union Cabinet Minister, Mines