Average amount of cash dues per indebted household as on June 30, 2012, according to National Sample Survey Office, 2013.
Published in Chapter:
Farm Debt Waiver in India: An Ephemeral Palliative or an Enduring Risk Management Tool? A SAP-LAP Analysis
Sushma Nayak (Symbiosis International University (Deemed), India) and Shrabana Mukherjee (Association of Indian Forging Industry, India)
Copyright: © 2019
|Pages: 18
DOI: 10.4018/978-1-5225-7208-4.ch012
Abstract
Farm debt waivers have been introduced in India, from time to time, to provide relief to the indebted farmers. The chapter focuses on the viability of farm debt waiver in India—whether it serves as an ephemeral palliative (a temporary reassuring measure) or an enduring risk management tool (a permanent remedy to build resilience against a longstanding debt crisis)—for farmers by employing situation, actor, process, learning, action, performance (SAP-LAP) framework. Loan waivers occasionally appear as a quick fix to alleviate farmers' misery. They trigger moral hazard as the farmers make no attempts to repay the loans themselves with the expectation that an imminent waiver from the government would clear their debts, thus ruining the credit culture of the country. From a policy viewpoint, it is imperative to make agriculture sustainable by lessening inefficiencies, augmenting income, moderating costs, and affording protection through premeditated and well-defined insurance schemes.