Current corporate NPAs, if recovered, could clear farmers loans across India

 NEW DELHI: One diamond dealer Nirav Modi loots a bank of Rs 11,400 crores and takes off with the government not even blinking an eye. At least not in any manner that is visible to the public at large. But this is just a fraction of the Rs 11.5 lakh crores of Non Performing Assets (NPAs) owed by corporates to the banks, that if paid back would clear the loans of the distressed farmers across the country.

Agrarian experts have been doing their maths since the Nirav Modi fraud, more so as the excuse being pedalled by governments to farmer bodies is that there ‘is no money’ to deal effectively with this crisis. It has taken escalation of the struggles in each state to extract some funds from the state governments for the acute agrarian distress, and even so the amount allocated has been insufficient or attached with impossible conditions. The central government has refused to part with a penny for the farmers, maintaining silence in the form of defense.

The ‘no money’ excuse clearly does not wash in the face of the monies taken away by Nirav Modi with total ease by exploiting the Letters of Undertaking innovation. And despite supposed audits by any number of agencies including the Reserve Bank of India entrusted with the security of banks and taxpayers money.

As agrarian expert Devinder Sharma told The Citizen, a basic idea of the damage done could be assessed from the statistics from the states, say Maharashtra. After a major struggle that had farmers camping on the streets of the state last year, the Fadnavis government announced the allocation of Rs 34,000 crores for loan waivers that was expected to benefit 89 lakhs farmers keeping the ceiling at 1.5 lakhs. As Sharma said, Rs 11,400 crores taken away from the Punjab National Bank by Nirav Modi was one third of this amount. And by conservative estimates would have brought relief to at least 30 lakh farmers in the state that has seen a spate of suicides in the past years.

In Punjab ,the state government announced Rs 9500 crores as the fund for waiving loans. Less than the money provided through a series of Letters of Undertaking by the Punjab National Bank to Modi. The Amarinder Singh government kept the ceiling at Rs 2 lakhs, with the funds thus expected to aid 10 lakh farmers. However, till date, as Sharma said, only 170 crores has been released. There is ‘no money’ despite the big promises by the Congress government that used the agrarian distress as one of its campaign issues.

All India Kisan Sabha President Ashok Dhawale took this argument a step further. He pointed out that just a handful of corporate owe the banks (Non Performing Assets) Rs 11.5 lakh crores. He said of this Rs 2 lakh crores was officially written off by the Modi government. But if even the remaining Rs 9.5 lakh crores is realised, it would clear the bad loans of almost all the farmers in the country.

Dhawale said it was well known that the former Reserve Bank of India Governor Raghuram Rajan had to leave as he was insisting that the NPAs be recovered. “He was clear that without this the entire banking system will collapse,” Dhawale said. He said that the handful of corporates included Mukesh Ambani, Anil Ambani, Gautam Adani amongst a few others.

Significantly the issue has been raised in Parliament as well. Janata Dal(U) Rajya Sabha MP Pawar Verma raised this, referred specifically to the Adani Group in the House in 2016. He said that the company got “unimaginable favours” and that its debt at that time stood at Rs 72,000 crores. At that time Verma said, “Yesterday it was mentioned that the entire amount that the farmers need to pay as crop loans is Rs 72,000 crore. The Adani Group itself owes to the banks Rs 72,000 crore.” This was reported in some detail in the media.

Dhawale said it was essential for the government to break its silence on the issue of agrarian distress and loan waivers, and come out with concrete measures. He said that the state governments were always crunched for resources, and in the past too the central governments had to bail the farmers out in time of deep crisis. The VP Singh government waived loans up to Rs 10,000 per farmer across the board. This was a high figure in 1989. In 2008 the Manmohan Singh government also intervened for the farmers albeit with a five acre ceiling that favoured the sugar belt in Maharashtra. The Modi government, Dhawale pointed out, has resisted all efforts, and looked the other way despite the intense agrarian distress.

Just two days ago Punjab lawmakers in an interaction with the families of the farmers who had committed suicide had little by way of suggestions but more by way of advice to the poverty stricken families: curb spending, do not waste money. If this as reported by the local media is anywhere close to the truth it shows the complete apathy of the ruling elite to the distress that has had farmers killing themselves when all efforts to eke out a living fail. Mass protests across Rajasthan, Maharashtra, Punjab, Karnataka have drawn reluctant response from the governments, and silence from the central government that has shown no signs of intervening to help out the farmers in distress.