On 11th December, Reuters published a story citing ‘government sources’ that the Narendra Modi government is “likely to announce a loan waiver worth billions of dollars to woo millions of farmers ahead of general elections” after the party had “suffered a rural drubbing in state polls”.
The BJP suffered a political rout in three heartland states which are primarily agrarian in nature. Madhya Pradesh, Chhattisgarh and Rajasthan had a BJP government before the Congress wrested the power away recently. The report insinuated that the BJP, in order to get back the lost support in these states may soon start working out a detailed plan to allocate money to “write off farmer loans”.
“The plan could see as much as 4 trillion rupees ($56.5 billion) in loans written off, the government sources and analysts said.” reports Reuters followed by a statement of another anonymous government source who says that the “farm loan waivers would be the biggest help the government has ever provided to farmers.”
Taking a cue from Reuters report, The Wire, which has a questionable track record, published an article citing Reuters’ sources. The Wire article also adds its own speculations that the Centre may reach out to the RBI to help it out with farmer loan waiver.
However, the day Reuters published its report, Union Minister of State for Agriculture and Farmers Welfare, Purshottam Rupala had answered an unstarred question in the winter session of the Lok Sabha which said exactly the opposite [pdf].
On 11th December, Rupala, in an answer to a question raised by Shiv Sena MP Bhavana Pundalikrao Gawali Patil, had answered in clear terms that the government is not considering any report regarding farmers loan waiver. To her question on reasons why the Centre would not work on the farm loan waiver schemes, Rupala had answered, “The Union Government at present is not considering any loan waiver Scheme for farmers. Such waivers may impact the credit culture of a State by incentivising the defaulters even if they are in a position to repay the loan and thus create/amplify the moral hazard by discouraging those borrowers who have been regular in repaying their loans. Further, each waiver granted makes it even more difficult to reject any future similar demand.” This has been the government stand even back in July 2018 when a similar question was raised in the Parliament.
Considering Reuters published the report on a day the Union Minister had said the exact opposite, it makes people wonder whether the Shiv Sena MP had asked this question to Union Minister on basis of the Reuters report. OpIndia reached out to the Shiv Sena MP who denied any knowledge of Reuters’ report. “MPs can ask questions to the ministers and not all are answered in the Parliament. This was an unstarred question, hence it was not taken up in Parliament, but the same was answered by the concerned minister,” she said. “We asked the government whether there are any farmer loan waiver planned, the government said no,” she added.
So it appears that Reuters published a story citing anonymous sources, claiming the exact opposite of what the Minister had said. Not only that, but Reuters also uses the phrase ‘waive off’ and ‘write off’ of loans interchangeably in its report, which further raises doubts on their credibility.
While it is not clear why Reuters did such reporting, people on social media were speculating this could be a fake news spread by the Congress-friendly media on behest of Congress to put pressure on Modi government.
bhaands of 10 Janpath have already started connecting with RBI reserve. pic.twitter.com/fQabgb9e7B
— Shashank (@pokershash) December 13, 2018
One of the theories is that this could be a ‘back up’ for Rahul Gandhi for not being able to deliver the farmer loan waive off promise for Karnataka.
All this done as backup for Rahul Gandhi for not delivering Farmer Loan waiver promise like in Karnataka.
Now Rahul Gandhi will say.. After coming to power at Centre, within 10 days they’ll waive loans. https://t.co/i3cTxg8ayq
— Ankur Singh (@iAnkurSingh) December 13, 2018
This may not entirely untrue since the Karnataka Government is struggling to make good of the promise as the government is reportedly not able to finalise the list of farmers whose loans could be waived off.
In the 5-state Assembly election results declared on 11th December, the BJP could not retain the 3 states, Chhattisgarh, Madhya Pradesh and Rajasthan, it was in power. The BJP also had a disappointing performance in Telangana and Mizoram.
One of the promises Congress had made in its manifesto was waiving off farmers’ loans within 10 days of coming to power. Congress President Rahul Gandhi, during his campaign rallies, took digs on PM Modi for not waiving off farm loans while writing off (wrongly propagated by Rahul Gandhi as waiving off and as repeated by Reuters above) loans of ’15 close businessmen friends of Modi’.