RBI Governor says farm debt waiver schemes are ineffective

Udaipur, Dec 27: RBI Governor Raghuram Rajan on Saturday has put a question mark on farm debt waiver programmes of various state governments. He felt such schemes have more or less constrained the flow of credit to Indian farmers. Speaking at the annual conference of Indian economic association, the RBI Governor said,“How effective these debt waivers have been? . . . studies . . . show that they have been ineffective.” It may be recalled that the governments of Andhra Pradesh and Telangana had declared loan waivers for farmers hit by Phailin cyclone of last year. In 2008, the then central government had also announced an Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) with a budget of Rs. 52,516 crore.