Source: The Hindu Editorial (Improve your Reading Skill)
In largesse we trust
Two separate decisions on farm loan waivers could have a domino effect
Chairing his first cabinet meeting after taking over the reins in Uttar Pradesh, Chief Minister Yogi Adityanath approved a write-off on outstanding farmer loans of up to ₹1 lakh taken before March 31, 2016. The State cabinet also decided to waive loans worth ₹6,000 crore extended to small and marginal farmers that had turned into non-performing assets. Together, this package, aimed at fulfilling the Bharatiya Janata Party’s election promise, will cost the exchequer about ₹36,000 crore. There was no mention of a bigger plan to ramp up the farm sector, in which U.P. invested just 2.3% of total expenditure in 2016-17 — one of the lowest rates across major States. A little earlier, the Madras High Court ordered the Tamil Nadu government to extend a similar farm loan waiver scheme for small farmers (with land holdings of up to 5 acres) and marginal farmers (who own up to 2.5 acres) to all farmers. Officials have even been forbidden from trying to recover loans where repayments have slipped. The State, which had already doled out ₹5,780 crore on this front, would need nearly ₹2,000 crore more to comply with the court’s order. This is a worrying trend for a country that wants to double agricultural incomes by 2022. Not only could it trigger a countrywide clamour for similar debt relief packages, political parties would also be more inclined to make such grand promises ahead of future polls. This is a slippery slope with multiple unintended outcomes likely in the years to come. The Madras High Court has clearly reached into the the domain of the executive. The risk is that this overreach could be cited in other courts to seek omnibus loan waivers. Opposition parties in U.P. have already criticised the cap of ₹1 lakh on farm loans that will attract relief. The timing of these drastic interventions is unusual as India had a good monsoon in the 2016-17 crop season, after two years of drought, and a bumper output is expected for all major crops barring sugarcane. Forgiving loan burdens is a powerful political gesture that glosses over the fact that governments have had little patience to make agriculture a sustainable economic activity with efficient linkages to formal markets, be it for credit or for supply chains from farm gate to fork. FDI of up to 100% was allowed in food retail trading but investments are stuck over the reluctance to allow a small proportion of non-food sales. Writing off loans as a blanket policy, without scrutiny and restructuring attempts creates a moral hazard for borrowers, who will have no incentive to stick to credit discipline. Frequent write-offs will prod banks to invest in alternatives such as the Rural Infrastructure Development Fund instead of reaching out to individual farmers to meet their agricultural lending targets. In which case, usurious local moneylenders could have a field day.
The chemical attack in Syria must compel the global community to bring the war to an end
The barbarism of Syria’s civil war was on display once again when at least 72 people were killed in a chemical attack in Idlib province. The heartbreaking images of dead and injured children and desperate parents from Idlib’s Khan Sheikhoun have understandably triggered global outrage and calls for international action. Syrians have suffered a lot over the past six years. There have been multiple chemical attacks for which both the regime of Bashar al-Assad and the jihadists were held to blame. More than 400,000 people are believed to have been killed and millions displaced since the crisis broke out. With violence continuing unabated and the Assad regime not showing any real interest in settling the crisis, even hopes for peace and normal life look surreal. The needle of suspicion for the Idlib attack points towards the regime whose murderous nature has been exposed several times in the past six years. Idlib is a rebel-held province where the regime is currently carrying out air strikes. Activists in the province and Western governments have claimed the regime used chemical agents in Khan Sheikhoun. If they are right, Damascus has not only committed a war crime but also violated a major international agreement. After the 2013 sarin attack in Ghouta in a Damascus suburb that killed hundreds — which was also blamed on the regime — the U.S. and Russia had agreed to remove Syria’s chemical weapons stockpiles. As part of the deal, 1,300 tonnes of chemical agents were shipped out of Syria and destroyed. The question is, where did the latest chemical weapons come from? Syria had either hidden some of the stockpiles or clandestinely developed such weapons after the deal was reached — both serious violations. This is a regime that neither respects the fundamental human rights of its people nor cares about the international agreements it has entered into. Irrespective of its role in Tuesday’s attack, the Syrian regime is primarily responsible for the country’s humanitarian catastrophe. For years, it justified whatever it did in the war saying it was fighting terrorism. But how long can Mr. Assad sustain this argument, leaving millions of people vulnerable to bombers, snipers, chemical agents and tanks? The real crisis of Syria is that its regime is acting with a sense of impunity, thanks to the blank security cheque the Russians have issued to Mr. Assad. The international community could not hold Mr. Assad to account for his actions at any point of the Syrian war, which worsened with the involvement of other regional powers. The latest attack should be a wake-up call for all these countries. Syria has to be treated as an immediate priority, and in a way that transcends the narrow geopolitical interests of regional and global powers. There must be a coordinated effort to bring the war to an end, and to hold the perpetrators of war crimes accountable for their barbarism. Only then can Syria be rebuilt.