For some farmers, loan waiver is a bittersweet deal

RAW DEAL: Farmers, who paid back their debts, feel they made a mistake by being honest.

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Jalgaon, Maharashtra: "All agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007 will be waived off under a scheme of debt waiver and debt relief for farmers."

These words of Union Finance Minister P Chadambaram in his Budget Speech have already brought some cheers across the countryside.

And bankers, too, can relax. For, it's not a write-off on their books. In fact, they stand to regain some money, which they had given up as lost forever.

"The advantage here is that most banks had written off many of these loans as bad debts. Now this could be corrected. Besides, the FM has formidably made it clear that banks would be compensated well," HDFC Bank Chairman, Deepak Parekh, says.

But while some farmers are celebrating their 'gains', there are others who feel they made a mistake by being honest.

"What the Government has done is not correct. What about those of us who've already paid back our debts? How is this fair on us? In this case, the government should deposit our money too in our accounts," a farmer in Chopada-Jalgaon, Bhushan Birari Patil, demands.

The Union Finance Minister's intentions may have been noble, but with banking tied up in procedure and moneylenders going on the back foot, Chidambaram's farm loan waiver has come as a bitter-sweet boon for the farmers in North Maharashtra.

For the average honest farmer, it's the worry of a new kind — a 'regret' of having paid back the entire loan amount and a 'fear' of having lost his only access to emergency money. For, with money lenders now shying away from lending money any more, the farmer does not have any access to easy loans in case of a crisis.

"In case of an emergency, it was only a money-lender who'd give us money even at night," another farmer in Pathonda, Jalgaon, Vinayak Deva Birari, says.

"Look at it this way: if I borrow Rs 1 lakh from a bank, I only get Rs 85,000. And over and above that, I have to spend another Rs 7-8,000 as expenditure on filling forms, getting NOCs from 20-23 banks, buying stamp papers, arranging mortgages etc. And invariably it takes at least three months, " Nivruti Shinde, a trader and farmer, points out.

Local money lenders also add to the fear by saying that they would rather hold on to their money now instead of 'lending' and losing it.

"How convenient! Not all farmers borrow money only for agricultural purposes. It may even be for a daughter's wedding or for any other emergency. Today, anyone can now turn around and call it an agricultural loan and, therefore, not pay up," a money-lender, who didn't wish to be identified, says.