There has been no shortage of conspiracy theories regarding the finance minister’s announcement of the Rs. 60000 crore farm loan waiver. Let me add one more theory to it.
According to a survey done by the Business Standard, which got published today, the total outstanding bad farm debt in the books of commercial banks totals Rs. 11000 Crore. The rest of the Rs. 60000 Crore of bad debt is held by sundry co-operative banks and regional rural banks.
The BS article also mentions that the compensation to the banks is going to be in the form of cash, and not in the form of a mixture of cash and bonds as was speculated earlier. There is no mention of the timing of the transfer of money from the governments to the banks. Also, the article says that the government will allow the banks to transfer their provision for doubtful debt to the bottomline as profits.
Now, name one Indian “leader” who you would associate with co-operative banks.
This entire announcement of the farm loan waiver is nothing but a conspiracy to transfer taxpayer funds to random cooperative banks, whose main business is to dole out (note that i’m not saying loan) funds to politicians who back them and their families. Starting from the honourable President of course.
Aadisht had written that this waiver was a conspiracy to recapitalize PSU banks. That in itself, as a first step of privatisation, might have been remotely acceptable. However, now it seems like it’s more like a conspiracy to fund politicians using taxpayer money – indirectly by way of funding co-operatives and regional rural banks. A fantastic plan, one must say. One that has all of the President’s blessings.