India’s latest ‘Loan waiver’ scheme for farmers in the 2008 budget has been trashed by Punjab Chief minister Badal with facts, who described it ‘as a farce, fraud and cruel joke’

To protect the farmer Punjab MUST pass laws, a la Mahrashtra, to hold the greedy usurious village ‘Bania’ in leash

STOP PRESS:  Indian Stock Market & economy in doldrums



Washington, D.C., Wednesday, March 05, 2008 - A phony partial debt default readjustment scheme for India’s farmers, which is supposed to cost Rs. 60, 000 crore ($. 15 billion), announced in the latest national budget, presented in the Indian Parliament the other day, is being trumpeted as if all the debts of the poor Indian farmers (which includes the Punjab farmers as well) are going to be forgiven. This populist dezinformatsiya, (a lie really) which is being circulated by the Indian propaganda machinery, with an eye on the Indian general elections, due by May 2009, has even ‘earned’ a bogus headline from the usually reliable BBC whose report is headlined, “India cancels small farmers' debt. The Indian government is to cancel the entire debt of the country's small farmers in a giant scheme that will cost 600 billion rupees ($15bn; £7.6bn).” Read the above mentioned inaccurate BBC report, dated February 29, 2008, by clicking at the following link: >   http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7270361.stm  <

By playing with words (‘loan waiver’) the Manmohan Singh government may have fooled the BBC but, it is playing with the lives of the Indian farmers (who make up over 71.3% of India’s rural population, or about 800 million unwashed souls) who live in squalor perpetually beholden to the usurious village ‘Bania/Brahmin’ money lender who is always in cahoots with the corrupt police and the courts. 

For once Punjab Chief Minister, Parkash Singh Badal, has spoken the truth, as far as the Punjab farmer is concerned, when he trashed the above ‘debt cancellation scheme’ of the Manmohan Singh government (and the center piece of the 2008 Indian Budget) presented in parliament by the Indian Finance minister, Palaniappan Chidambaram. Badal described the farmers’ loan waiver in the union Budget, ‘as a farce, fraud and a cruel joke’ on farmers of Punjab. It is a big myth, he said, that loans of farmers with holdings up to five acres had been waived. It is only the default payment that has been waived, while the farmers will still have to pay the loan. “At best you can call it a partial debt default readjustment scheme,” said Badal. (See report in the Tribune of 4 March, 08, headlined, ’Loan waiver’, about Badal’s interaction with the media by clicking at the following link: >   http://www.tribuneindia.com/2008/20080304/punjab1.htm#4  <)

Addressing the media last Monday (3 March), Chief Minister Parkash Singh Badal thundered that, “The term ‘Loan waiver’ is the biggest misnomer of the century.” Elaborating his point, Badal said that the scheme partially covered only those farmers who had defaulted on loans taken as on 31 March 2007 and due for repayment on 31 December 2007. The total debt liability of Punjab farmers is Rs 35,000 crore (as of date) and they would get relief not exceeding 3 per cent of their total burden. The maximum benefit that Punjab will get out of the central government’s debt default readjustment scheme costing Rs 60,000 crore is a meager 1, 223 crore, and that too in staggered book adjustments of institutional loans. ‘For Punjab farmers to get only Rs 1,223 crore was a grave injustice to the state of Punjab which had depleted its water table and overused its land to feed the nation’ said Badal.

The Chief Minister repeated to the media that this amount is only 3 per cent of the total debt liability of Rs 35,000 crore of the Punjab farmers and merely 2 per cent of the total so called loan waiver announced. It is a well-known fact that Institutional crop loans are re-energized every six months by different banking institutions and thus these are not the real source of farmers' woes. The real back breaking burden comes from non-institutional loans taken by the farmers from private money-lenders. Since, the interests of both the lenders and borrowers have a common ground and exist on long-term relationships, the Centre should release funds to meet these loans, directly to the lenders or through the farmers. The total amount of these loans comes to about Rs. 12,000 crore. He said that the poorest of the poor have been left out of the scheme, as there is no provision for the 15-lakh farm labor or for hundreds of thousands of landless farmers in the proposed scheme. He said that according to details gathered by him from the Government of India and the State Government records, there was no such thing as a ‘Loan waiver scheme’ in the Union Budget and the term is a huge fraud played on poor and innocent farmers "What has been done really is a mere ‘partial debt default readjustment scheme’ and there is nothing such as 'across-the-board loan waiver', he added.

Chief minister Badal also demanded that, the ratio of relief in the so-called debt waiver announced in the Union Budget should be made proportionate to the contribution of the States to the Central food kitty. If this is done, Punjab, which contributes over 50 per cent of the food grains in the national pool, will be entitled to Rs 30,000 crore out of the announced scheme, of Rs. 60, 000 crore. By doing this, the Centre would be doing no favors to the State of Punjab but would merely be giving it its due. Badal reeled out data to substantiate his point. He said, that actually, Punjab farmers stand to lose on account of the joint land holding system prevalent in the State. These joint land holding usually exceed five acres, rendering most of the farmers ineligible. He said the formula followed by the Centre to benefit the farmers is skewed and had hit the Punjab farmers the most. He criticized the Centre for ignoring the 15-lakh odd farmer workers, equally affected as the small farmers by excluding them from the package. Besides, he said the tillers of land on “theka” had also been excluded.

The Punjab Chief Minister also said that small farmers had taken 40 per cent of all farm loans from moneylenders; and they too have been excluded from the package. The total land holdings in the Punjab are ten lakhs and since these are mentioned as joint ownerships they far exceed five acres limit, even though individually many farmers own less than five acres. Thus, nearly 80 per cent of the farmers in ten lakh holdings would be left out of the ambit of the so called central scheme. In order to make ‘the cosmetic measure’ truly meaningful individual ownership should be made the criterion and the landless farmers must be brought within the parameters of the loan readjustment scheme. Also Mr. Badal also demanded that the rate of interest on farm loans should also be brought down to four per cent. Well said Mr. Badal but, you did not mention the usurious village money lenders – the ‘Banias’ who suck the blood of the Punjabi farmer.

It is obvious that the settling of debts of a small section of the poor farmer ‘community’ which is a beneficiary of institutionalised (Bank) loans will not help matters much. Passing out debt relief in a one-time move in the budget, and glossing over it till the elections are over, is also meaningless and down right evil. The fact that most of the farm borrowings is from greedy moneylenders has been overlooked by the Indian finance minister. Chief Minister Parkash Singh Badal also in his interaction with the media, last Monday, did not highlight the role of the greedy/merciless money lender in the Punjab although he talked of every thing else. He ought to now take the lead and identify, and ‘break the back’ of the money lender (Banias/Arthias) who lend money at exorbitant rates to needy farmers in the Punjab, a la Sir Chotu Ram. In 1936 noted farmer leader the late Sir Chotu Ram (b. 1881–d.1945) evolved a formula to help farmers reeling under heavy debts following which an indebtedness act was promulgated. In 1936 the late Sir Chotu Ram evolved a formula in the Punjab to help farmers reeling under heavy debts following which an indebtedness act was promulgated. Chief Minister Badal should consider reviving some of the crucial clauses of the 1936 act which envisaged that the loan taken by farmers who have paid as much interest as the principal amount borrowed by them be waived completely. The act also provided for setting up of debt conciliation boards in each district to resolve disputes between borrowers and lenders. The Punjab state government should also invoke clauses of the money lenders' registration act promulgated in 1938 that made it binding on all private money lenders to register their names with the government. If the Punjab government follows the pioneering steps taken by Sir Chotu Ram it will help the Punjab farmer (mostly Sikhs) wriggle out of indebtedness which has caused 15, 000 farmers to commit suicide in the last few decades.

The state of Punjab should hold the money lenders (banias) in leash and pass laws, on the pattern of Maharashtra, to regulate the advancing of loans by money-lenders and non-institutional agencies. Synchronized with a check on the money lenders the Punjabi farmers should be provided subsidized inputs and timely buyback of their produce (wheat etc.,) at reasonable rates NOT at half the world rates as is currently happening. The Punjab government is the one who will have to take the initiative to protect the Punjabi farmer from the greedy village Bania as the Brahmin/Bania oligarchical rulers, including Dr. Manmohan Singh, in Delhi, WILL NOT.

STOP PRESS: One quick glance at the falling Bombay Stock Exchange SENSEX index, which is the barometer of Indian capital markets and the state of the Indian economy, one is reminded of  Shakespeare and a famous line from his play, Hamlet (Act 1, scene 4, 87-91) which reads, “Something is rotten in the state of Denmark”. The Bombay Stock market has been acting like a yo-yo this year when it has broken four all time negative records of free falls which have financially wiped out hundreds of thousands of small investors who did not have the staying power like the wealthy ‘Seth mafia’. Readers are advised to stay away from this den of thieves in Bombay called the Bombay Stock Market. Appended below is a comparative chart of the biggest falls ever, having taken place in the past 42 days (in 2008) which say a ‘book’ about the troubled and wobbly Indian economy. Appended below is a chart which shows the ten highest falls in the history of the Bombay Stock Exchange:-   

SENSEX - THE BAROMETER OF INDIAN CAPITAL MARKETS

 &

THE INDIAN ECONOMY

SENSEX is the abbreviation used to indicate the Bombay Stock Exchange Sensitive Index. The Bombay Stock Exchange SENSEX index is the most popular and precise barometer of the Indian stock market which reflects the general health of the Indian economy. The Sensex is an indicator of all the major companies of the Bombay Stock Exchange. It is the oldest stock market index currently in use in India. The base value of the BSE Sensex is 100 on April 1, 1979. The Sensex is basically an indicator. It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. SENSEX is not only scientifically designed but also based on globally accepted construction and review methodology.

 

Highest falls in the SENSEX EVER *

 

Mumbai SENSEX HISTORY: *

Biggest falls by number of points

Highest fall      ***

Jan 21, 2008 -- 1, 408.35 points ***

2nd highest fall ***

Mar 3, 2008 --      900.84 points ***

3rd highest fall ***

Jan 22, 2008 --      875.41 points ***

4th highest fall  ***

Feb 11, 2008 --     833.98 points ***

5th highest fall

May 18, 2006 -     826 points

6th highest fall

Dec 17, 2007 --     769.48 points

7th highest fall

Oct 17, 2007 --     717.43 points

8th highest fall

Jan 18, 2007 --      687.82 points

9th highest fall

Nov 21, 2007 --     678.18 points

10th highest fall

Aug 16, 2007 --     642.70 points

*   Numbers culled from Times of India newspaper  

 >   http://timesofindia.indiatimes.com/articleshow/msid-2834025,prtpage-1.cms   <

***    Record  SENSEX falls in the year 2000

 

Mumbai SENSEX HISTORY: *

Biggest falls by date

Mar 3, 2008 --     900.84 points ***

Feb 11, 2008 --    833.98 points ***

Jan 22, 2008 --     875.41 points ***

Jan 21, 2008 -- 1, 408.35 points ***

Dec 17, 2007 --    769.48 points

Nov 21, 2007 --    678.18 points

Oct 17, 2007 --     717.43 points

Aug 16, 2007 --     642.70 points

Jan 18, 2007 --      687.82 points

May 18, 2006 --    826 points

*   Numbers culled from Times of India newspaper 

 >   http://timesofindia.indiatimes.com/articleshow/msid-2834025,prtpage-1.cms   <

***    Record  SENSEX falls in the year 2008