Monday, March 3, 2008

Farmer loan write-off

Congress goverment in India decided to write-off loans worth 60,000 Crores or 15billion USD. Farmers are delighted. Banks are scratching their heads as of now to figure out how to handle their cash flows over years to adjust this move.

My point of view is something different. I dont think farmers commit suicide due to loans owed to banks instead they are forced to commit suicide due to local goondas or thugs or private lenders. Private lenders lend money at high interest rates and they hire people to recover money by "all kind of methods".

People generally borrow money from friends, relatives or private lenders more than banks. I honestly feel this waiver would benefit rich farmers more than the real poor, affected farmer.

Anyway, government cannot do anything for people who borrow money in others ways !!!

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