Liberals' narrative on loan waivers is partly responsible for perpetuation of such policies

India is currently facing twin-loan problem of non performing corporate loans and farm loans. A climate for farm loan waiver is slowly building up. Understandably, some analysts are concerned over continuing the "bad-practice" of farm loan waivers, that can make this a perpetual solution, as opposed to it being a short term, one time solution.

There are also arguments over the broader policy discourse that created the climate for such policies. Often, many point "socialist", "leftist" narrative as the leading factors. If we were objectively to analyse the reasons behind the built up legitimacy of the loan waiver policies, liberals have an equal share. Two actions of omission and commission illustrate this.

1. Attempts to dispute and delegitimise farm suicides: The response of some to farm suicide crisis, cited as reason for farm loan waivers, was to dispute the existence of such problem. 

Many tried to twist and turn the data to prove that economic distress is not the main reason for farmers' suicides. This analysis has two problems in general. The first is with the data chosen and the type of analysis. The second and more important problem is that many of these people who dispute the existence of farm suicides have never been to villages and interacted with such people. They were just trying to figure out insights from incomplete data by adding own biases to it, to support the pre-determined conclusions. In addition to that, those who documented farmers' economic distress were ridiculed.

The overall result of this narrative is that it reduces the importance of a real issue, impeding the process to find out long term solutions.

2. Deliberate overlooking of corporate waivers and revenue foregone: Till few years back, GoI's budget document used to publish "revenue foregone" figures. It was around 6 lakh crore per year. This is the revenue foregone due to subsidies to corporates in form of tax and other forms. Some of it may be necessary to attract investment, the results of which can only be seen in long term. But, it is hard to argue that all 6 lakh crores was done with legitimate purpose. Similarly, it is hard to argue that there is no wilful defaulter in the current NPA crisis.

Many have cited these figures pointing out the difference in treatment towards farmers and corporates. While, one wrong may not justify another wrong, there is an element of truth in this argument.

Again, if we were to objectively recollect the discourse over loan waivers, one can easily see that much of the liberals' concerns were only with farm loan waivers. They deliberately neglected and chose not to talk about the 'holy grail' of corporates. For some reason, any support to corporates is perceived to be good and any support to farmers is portrayed as regressive.

Instead of advocating savings by the low-hanging fruit of reducing inefficiencies in revenue foregone, some advocated saving by either increasing college fee or reducing budget towards welfare programmes. Of the many reasons that people conceive liberals to be anti-poor, this is definitely one among them.

The result of overlooking the corporate waivers is that today there is no legitimacy for one to stop farm loan waivers, in the presence of stark corporate loan waivers.

The issue of bad loans definitely needs a long-term solution because the short term solutions of complete waivers is not sustainable in long term. For this, acknowledging the facts is important in first place. Sadly, there are no towering figures in today's discourse who has both the legitimacy and the integrity to objectively look at the situation, propose measures and lead the discourse. Apart from data witches who use data to support pre-determined conclusions, all we have in the discourse today is "labels", "ideologies", and "personalities".

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