Loan Waiver Scheme in Uttam Pradesh

An open appeal to Prime Minister Mr Narendra Modi

Current ruling party BJP during election campaign in Uttam Pradesh had promised to write off loans given to farmers by banks. UP government may take decision to write off farmer's loan during their maiden cabinet meeting Today. In this way BJP may take credit of fulfillment of promises made. But this will adversely affect credit culture and recovery culture in banks.

I would like to mention here that waiver of loan has been resorted to by almost all parties in the past . I was however of the view that BJP will at least refrain from such actions which proves disastrous for PSU banks.

Mr Devi Lal in the beginning say in eighties used loan waiver scheme to win election. Since then all non-BJP parties used loan waiver tool to enhance their vote bank . Loan waiver scheme of Mr. V. P. Singh (as the then PM) in eighties and that of UPA in the year 2010 can be called as prime contributor in current sickness of banks.

Loan waiver scheme is a boon for defaulters and a punishment for those honest  farmers who paid their loan in time. Once loan is waived,it sends message to all borrowers that repayment of loan   is a foolish act and they should wait till next election. Not only this, even traders and industrialists avoid  repayment of loans. Not only small borrowers , but big borrowers also take advantage of such schemes in some way or the other, by buying bankers or by politicians.

Besides, Bank Officers also take advantage of this scheme . They start earning  huge commission in sanction of loan. And some of them even openly speak loan takers not to repay loan because it will be waived sooner or the later. In this way , wrong culture is irrigated.

Some of Bankers do not hesitate even in earning  in the process of loan waiver and in one time compromise settlement with high value borrowers who default in repayment. Tendency of will default increases and bank staff learn the art of earning commission in such type of charity works in which borrowers, bankers and politicians all are happy . It is only honest taxpayers who have to bear the burden of such dishonest and unethical activities.

I do not hesitate to write here that this is why total share of bad assets has gone up from less than one percent  upto the year 2010 has gone above 10 percent in some banks in FY ended March 2017. I have no doubt that if all banks honestly treat all bad loan as bad loan, share of bad loan may go even  above 25 percent. This will prove a last nail in the coffin of banks. Government will have to infuse capital every year to save these banks if the same indiscipline and vote bank cul is perpetuated.


Politicians use banks to help farmers by writing off loans and similarly they apply verbal and telephonic pressure for sanction of hundreds and thousands of crores of rupees to big traders and industrialists. Further such demand for loan waiver will be raised in other states too.

I hope you will take care of it. In place of waiver of loan or one time compromise settlement with defaulters, government may give free seeds, free fertilizer,free power to farmers with the condition that farmers will handover all produce to a marketing body. Similarly government may give provide free infrastructure for setting an industry for short period till the industry crosses it's break-even point. Distribution of charity is not bad as it is bad to write of a loan.

In the same way I am very much  unhappy that Yogi government has changed the name of state highway and national highway to give help to wine dealers and hotels on highways. This act is clearly in defiance to oder of Apex court in this regard. This kills the very spirit behind order of the valued court.  I hope some one or the other  will file PIL in court and prove above act of UP. CM Mr Yogi as contempt of court.



Please take corrective step before it is too late. God bless you. If you are good , you should appear to be good .Above two steps will tarnish good image of BJP ,I have no doubt in it.

Please take corrective step before it is too late. God bless you. If you are good , you should appear to be good .Above two steps will tarnish good image of BJP ,I have no doubt in it. Winning an election by growth and social welfare activities on ground is commendable but distribution of freebies to win election is not good from any angle.