[Indian Express February 23, 1985 Letters: IRDP Loans
Sir: Kudos to Mr S. Aiyar for highlighting the inherent drawbacks of IRDP in his article, “How not to cure poverty.” But while observing that, IRDP has proved to be popular and everybody is happy, he seems to forget the banker’s woes. The banker is the most troubled and distressed person since the inception of the scheme for the following reasons.
§ He has to sanction and disburse the loans, bypassing all norms and checks and controls that were religiously followed hitherto.
§ He cannot reason why, with the proposed activity or the quantum of loan, nor does he have any say in the selection of the person or for that matter in any other vital decision in respect of the loan.
§ The loans are usually given on a mass scale, straining not only the workforce at his disposal but also the books of account.
§ After the disbursement a banker attracts problems in the form of periodical returns, statements and progress reports that he has to send to different agencies, apart from the task of calculating quarterly interests, overdues, recovery percentages etc. in respect of each account.
While brooding over precious funds going waste, he watches with agony, what is there to come next? - Tusar N. Mohapatra, Sambalpur, Orissa]
[Indian Express July 13, 1990 Letters: ‘Write-offs’
Sir: Such a hue and cry is being raised over the issue of waiving agricultural loans up to Rs. 10,000. But strangely enough the crores of rupees being written off by the nationalised banks, year after year, is never commented upon. The names of the industries benefiting from such ‘write-offs’ and “compromises” should be published in the public interest. - Nirmal Sarkar/Tusar N. Mohapatra, New Delhi]
[The Union Budget 2008 announced a loan waiver for poor farmers that is the largest debt forgiveness programme ever in India and among the largest waivers in the world... These are populist moves meant to woo an electorate. And my reaction to them is: thank goodness for such populism. The rich get subsidies in numerous hidden ways, in response to lobbying that goes on behind the scene all the time. It is good that the anticipation of elections is one time that the poor make some gains.
It is true that in principle there are better ways of reaching the poor, and the waiver of debts can raise anticipation of future waivers and distort behaviour. Nevertheless, being a kind of negative income tax, this is relatively non-distortionary, and in these times of growing inequality and farmer suicides, a desirable move. Stray notes in the Budget symphony by Kaushik Basu HT March 01, 2008]
Economics, it seems, has turned 180 degrees between 1985 and 2008. [TNM]