Tuesday, May 27, 2008

I too, toast…

…. to the achievements of the UPA government.

Came across this wonderful post, to which I cannot agree more.

It so happened that I wrote my first post on the eve of this year's budget and it so happened (again!) that I mentioned that we are back to the times of rural _______ programmes (fill it up with anything you want; they all mean the same – corruption!).

And it so happened (and again!)that right the next day the baap of all rural programmes was announced. The farm loan waiver. The scheme is flawed on so many levels I can't even begin to spell out. It's not just corruption this time. They are ruining the credit discipline of the entire agricultural sector. They are punishing the good borrowers. And they are not even covering the farmers who need it the most! We all agree agriculture is the priority sector for economy and yet such irrational and ruinous policy that backfires from all directions?!? I can't fathom how an economist prime minister could make any economic sense of it.

And when banks try to make business decision of restraining from further farm loans, government arm twists them into giving in. oh that's right, take the banks also along with them.

What is needed here is use of this Rs.71000 crores for improving irrigation, incentivize investment into supply chain for better delivery of farm goods to customers to improve margins for farmers (more than 40% of fruits and vegetables produced are wasted because of lack of proper cold storages or transportation facilities), crack down on hoarding, incentivize land consolidation and improving efficiency, etc etc.

What is not needed here is pouring tax payers money into farmers' pockets for free (not to mention nobody knows whose pocket it is actually pouring into), arm twisting banks to cough up more money that is going to default, create a whole generation of farmers who know they don't need to pay back loans because they are majority vote bank.

The funny thing is that it is going to backfire on the government also, because after all, we are talking about our politicians here and so we know where the money is actually going to go.

There, I toast again. I think I am drunk now.

Oh, read this too…

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