Farm loan waiver, secularism: Real Challenges before Uddhav Thackeray

Farm loan waiver, secularism: Real Challenges before Uddhav Thackeray

Agency News

The recently-announced Common Minimum Programme (CMP) of the Maha Vikas Aghadi, or the Shiv Sena-NCP-Congress alliance, is a a kind of socialist budget, which will be the real test before the newly appointed Chief Minister of Maharashtra, Uddhav Thackeray.

The CMP promises too much for the farming and secularism. A slew of measures to bring back farming sector back to pink is the major highlight of this CMP which include giving an immediate farm loan waiver, tweaking of the crop insurance scheme, remunerative prices for farm produce and solutions for irrigation problems in rural Maharashtra’s drought-affected areas.

But the experts in the field raise doubts over the implementation of this socialist measures without shaking the fiscal health of the State. The promises sound too good, but how far the Udhhav Thackeray-led administration can achieve this is a real question.

The other major highlight is the secularism. How far a Hindutva-based Shiv Sena can stick with the promise of secularism? The Shiv Sena was more Right-wing than the BJP and its parent organisation, the RSS. One saw the worst of the Shiv Sena during the Bombay riots of 1992-93, after the Babri Masjid was demolished in Ayodhya. The B.N. Srikrishna Commission, which probed the causes of the Mumbai riots that killed 900 people with majority being Muslims, named Shiv Sena in its report. But all believe that when the reluctant politician Uddhav Thackeray arrives at the Chief Minister’s chair, things may change. Even Thackeray scion, Aaditya Thackeray also raises new politics of environmentalism and all. Though shedding the Hindutva face will be hard, it will be a real challenge for Uddhav to walk the talk.

Agrarian distress is a recurring theme almost every year on account of either unseasonal rains or severe drought conditions. The outgoing Devendra Fadnavis government had unsuccessfully experimented with a large Rs 34,000 crore loan waiver scheme originally announced in June 2017, the implementation of which was as messy as the idea of the loan waiver itself. Due to implementation issues, the Fadnavis government could disburse just Rs 18,613 crore till date, covering 43.91 lakh farmers' accounts, according to the latest data shared by the Department of Co-operation, Textiles and Marketing of the Maharashtra government.

Now, by committing to an immediate farm loan waiver scheme, the Aghadi has promised a similar exercise in just two years after the BJP-led government's loan waiver. The question is whether large states can afford farm loan waivers as an annual ritual.

The Aghadi also promises fair market pricing for the farmer. This is another tricky area. Already there is a NITI Aayog-led high powered committee examining the overhauling of market-pricing mechanism linking to online trading, and transformation of the sector into a more efficient system. Much of its work is only on paper as of now. The Sena-Congress-NCP alliance will find it tough to walk the talk on all these promises.

The other promises include free education for girls from economically weaker families, women’s safety measures, interest-free education loans to children of farm labourers, one rupee clinics at taluka levels, more super specialty hospitals and medical colleges and health insurance cover to all citizens. Besides, there is a bid to attract more entrepreneurs promising ease of doing business, something the Narendra Modi government at the Centre has been stressing on for the last six years.

According to the state economic survey 2018-19, Maharashtra's fiscal deficit for the year 2018 stood at 1.8 percent as a percentage of the Gross State Domestic Product (GSDP). The fiscal deficit is the difference between revenue earned and money expended and is an important indicator of the health of that particular economy. Maharashtra has mostly maintained the fiscal deficit as a percentage of the GSDP within the stipulated limits recommended by the Fourteenth Finance Commission till now.

Prima facie, the CMP of the alliance makes all the right noises to appease the crisis-ridden sections of rural Maharashtra. But fiscal balancing and implementation will be the key.

The Aghadi, in its bid to present a socialist CMP, will run the risk of harming the state’s fiscal health, with promises such as a farm loan waiver and interest-free loans. This can have adverse effects not just on the state’s fiscal health but also on the banking sector.