Contact Your Financial Adviser Money Making MC
11 January
2019
 |
farm loan (The Total Investment & Insurance Solutions)
Joining the debate on farm loan waivers,
Asian Development Bank (ADB) Country Director Kenichi Yokoyama Friday said such
write-offs were against economic principles and cannot effectively address the
agrarian distress. Yokoyama also advocated for direct transfer of funds to
targeted beneficiaries as it would cut down leakages.
On farm loan waiver, he said most of the
people are sceptical about it as an economic principle and has moral hazards.
"There is a need to address agriculture sector distress...but economic
principle wise, farm loan waiver is not an effective means to address farm
distress," he said.
Earlier this week, RBI Governor Shaktikanta
Das said any generalised farm loan waiver adversely impacts the credit culture
and the behaviour of borrowers, amid various states announcing waivers. He said
loan waiver is related to the fiscal space that a particular state government
has. About Rs 1.47 lakh crore of agricultural loans are outstanding in Madhya
Pradesh, Rajasthan and Chhattisgarh, which announced waivers recently.
Appreciating the fact that India has a
platform to provide Direct Benefit Transfer through Aadhaar, Yokoyama said
analysis has to be done on how government can launch universal basic income
(UBI) scheme in the most efficient way.
Asked if there was a stress on fiscal
deficit, Yokoyama said ADB has no doubt about the government meeting the
target. "I think a clear framework is there and mandate given under the
Fiscal Responsibility and Budget Management Act. We don't have any doubt over
it," he said. The Centre has budgeted to contain fiscal deficit at 3.3 per
cent of the GDP in the current fiscal, lower than 3.5 per cent in 2017-18.
Last month, Finance Minister Arun Jaitley had
exuded confidence of meeting the fiscal deficit target of 3.3 per cent for the
current fiscal.The Total Investment
& Insurance Solutions
No comments:
Post a Comment