PM's letter to farmers creates stir

Gopika Gopakumar, CNBC-TV18

In a bid to draw political mileage, all loan waiver letters are accompanied by a special letter from the prime minister telling the borrower that all his or her debt has been waived by the government.

But this letter is creating resentment among many farmers who find that not all their debt is waived. The letter is also complicating matters for bankers who have to do the explaining.

Parshuram Patekar, Dairy Farmer said, “This is the PM's letter. It says debt will be completely waived off. But this is not so. We have to pay loans in installments. If I don't pay this amount then my subsidy will be cancelled.”

Farmers are now feeling cheated as the scheme becomes more clear to them. Those above the cut-off limit realise that banks are not going to completely write- off their debt. They have to pay back 75% of the loan if they have to avail of the 25% subsidy. So banks are now flooded with queries regarding the scheme and bankers are having a hard time convincing farmers about the benefits of the scheme.

Pradip Mahtre, Branch Manager, Thara, “The amount which is overdue upto December 31 2007 and unpaid till 29 Feb 2008. That instalment amount is waived. But the farmer feels is that the balance outstanding amount is fully waived. But we are convincing them and telling them these are the government guidelines. As per the guidelines we are giving you the benefit.

Clearly the prime minister's letter is sending out the wrong signals to the farmers. If it is a strategy to get their votes in the coming elections, it may well back fire for the UPA government.