Farm loan waivers to touch 2755.20₹ bn by 2019 elections: Report


Team Udayavani, Jul 6, 2018, 2:56 PM IST

New Delhi: Following Karnataka’s 344.40₹billion write off, the nation’s farm loan waivers will double to 2755.20₹ billion by the summer 2019 elections, says a Bank of America Merrill Lynch (BofAML) report.

Karnataka Chief Minister H D Kumaraswamy in the maiden budget of the Congress-JDS coalition government yesterday announced a mega Rs 34,000 crore farm loan waiver scheme. He capped the agricultural loan to be written off at Rs 2 lakh and added that all defaulted crop loans up to December 31, 2017, will be written off in the first phase.

According to global financial services major, the governments of both – Centre and States – are expected to take proactive steps to quell rural unrest in the run up to the 2019 elections. “We grow more confident of our call that farm loan waivers will double to 2755.20₹ billion by the summer 2019 elections after the Karnataka government wrote off 344.40₹ billion of farm loans of up to Rs 2 lakh,” the report said.

The report further noted that farm loan waivers, along with minimum support price (MSP) hikes, will support rural demand at a time of stress; however, rains are a swing factor. “If farm loan waivers really amount to about 1.5 per cent of gross domestic product (GDP), this should effectively raise farm income by about 3 per cent a year over FY18-20,” the report said.

Moreover, the rise in MSP will raise autumn kharif harvest farm income by 10 per cent in this fiscal. However, farm loan waivers will impact yields as loan growth recovers. Accordingly, “farm loan waivers need to be funded by UDAY-type bonds that will impact yields when loan growth revives,” it noted.

“In our view, it is very difficult for the current government to achieve its objective of doubling farmer incomes by 2022 unless it relaxes its inflation and fiscal deficit targets,” it added. 

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Priyanka Gandhi takes oath as LS MP after big win from Wayanad

Mangaluru: Speaker UT Khader urges focused discussions in upcoming winter session

Seven West Indies players to train at Chennai Super Kings Academy from December 1

Kundapura: Ulloor’s historic Kambala to be held on November 28

NIA conducts searches at 22 locations to probe human trafficking syndicate

BJP does not take decisions under pressure from Shinde, says Sena (UBT) leader

Gangavathi: School excursion bus overturns; Four students sustain injuries

Related Articles More

Priyanka Gandhi takes oath as LS MP after big win from Wayanad

Money laundering case: ED team undertaking searches attacked in Delhi

Where are we taking country for political dividends: Sibal after ‘Shiva temple in dargah claim’

Coast Guard’s maritime search and rescue exercise to kick off from Nov 28

Jharkhand horror: Man strangles to death live-in partner, chops her body into pieces

MUST WATCH

Grafting

Coconut Flower

Prakash Belawadi

Naxal Leader Vikram Gowda

Christmas Cake Fruit Mixing


Latest Additions

Priyanka Gandhi takes oath as LS MP after big win from Wayanad

Mangaluru: Speaker UT Khader urges focused discussions in upcoming winter session

Seven West Indies players to train at Chennai Super Kings Academy from December 1

Equity markets rise in early trade amid buying in HDFC Bank, SBI

Money laundering case: ED team undertaking searches attacked in Delhi

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.