Former RBI Governor Raghuram Rajan points at 'enormous problems' over Congress' farm loan waiver promise

According to former RBI Governor Raghuram Rajan, farm loan waiver promised by Congress party would lead to major issues concerning the fiscal of the state.

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Friday said that moves like loan waivers for farmers benefitted the “best connected” rather than “the poorest”. This comes just three days after the Congress party, which had promised a farm loan waiver, got elected in Madhya Pradesh, Rajasthan and Chhattisgarh Assembly elections 2018.

According to the former RBI Governor, farm loan waiver would lead to major issues concerning the fiscal of the state.

“It often goes to the best connected rather than to the poorest. It also creates enormous problems for the fiscal of the state once the waivers are done,” said Raghuram Rajan.

This comes even as the Congress party has already started working towards pushing the waivers with the help of financial institutions and banks in Chhattisgarh, where it won 67 out of the 90 state Assembly seats, dethroning Bharatiya Janata Party's (BJP`s) Raman Singh after 15 year.

A document issued by the co-operative department in Chhattisgarh addressing banks and financial committees went viral on social media. The document asks for the overall farmer loan details in the state by November 30.

While Zee News could not verify the authenticity of the document, sources said that some senior banking officers did admit that the party is intent on fulfilling its promises in the poll manifesto and is reportedly collecting inputs on how to waive off the farmers' loan in the state within 10 days of the new government's swearing-in.

Former Madhya Pradesh chief minister Shivraj Singh Chouhan had also reminded the Congress party of its promise to announce farm loan waiver within 10 days of forming the government.

“Congress has made promises such as farmer loan waiver in 10 days. Rahul Gandhi had said that if it doesn`t happen in 10 days they will change the chief minister. I have complete faith that they will fulfil this commitment made to the public,” the BJP strongman had said after tendering his resignation.