If the UP government fulfils its farm loan waiver promise, banks are likely to take a hit of Rs 27,420 crore and the scheme will lead to some stress on the state’s fiscal arithmetic, warns a report.
The BJP had in its UP election manifesto promised to waive farmers’ loans if elected to power. The party and its allies won a whopping 325 seats in the 403-member House.
An SBI Research report today said schedule commercial banks together had an outstanding farm credit of Rs 86,241.20 crore in UP with the average ticket size of Rs 1.34 lakh, as of 2016, most of which is to small and marginal farmers.
According to RBI data (2012), 31 per cent of the direct agriculture finance went to marginal and small farmers (landholdings upto 2.5 acre).
“Taking this as a proxy for UP as well, around Rs 27,419.70 crore will have to be waived off in case the farm loan waiver scheme is implemented for the small and marginal farmers, for all banks,” the report said.
As per the Socioeconomic and Caste Census of 2011, 40 per cent of rural UP households are engaged in cultivation. When it comes to landholdings, 92 per cent are marginal and small farmers in the state, according to the 2010-11 Agriculture Census.
Within the framework of China’s five-year plan, which outlines the country’s economic development goals for the 2016-2020 period, Beijing plans to improve the prosperity of some 70 million Chinese nationals, whose wealth is below the poverty line, according to the government data.
According to the People’s Daily, money allocated by the ADBC are expected to fund education, infrastructure construction in the rural areas, resettlement programs, support corn farming and tourism.
The newspaper added that the proposed measures could improve the wealth status of the poorest citizens of China.
The ADBC is China’s bank which aims at the development of the country’s rural areas and agriculture by means of raising and allocation of special funds to support the sector, as well as agriculture-related business operations in line with Chinese legislation, according to the bank’s website.
Farmer Ram Pal Singh voted for Narendra Modi’s promise of ‘better days’ in India’s 2014 general election, but he won’t be backing the prime minister again even after last week’s budget promised more aid to the countryside.
Growing discontent in rural India, home to two-thirds of the country’s 1.3 billion people, bodes ill for Modi as he tries to bounce back from a heavy defeat in a state election last year in Bihar and build a support base to keep power in the 2019 general election.
In an eyecatching announcement, the budget doubled spending on agriculture and farmers’ welfare to $5.3 billion in support of his promise that their incomes would double by 2022.
Yet critics say most of the extra spending is in fact an accounting entry that shifts the cost of an interest subsidy to the agriculture budget that was previously borne by the finance ministry.
“We have received nothing from the government. We don’t even recover our costs,” said Singh, whose 21-acre (8.5-hectare) plot is big by Indian standards.
wo failed monsoons, and sudden unseasonal rains, have caused widespread crop damage across northern India. Debt-laden farmers like Singh say low state purchase prices and a lack of compensation for crop losses are worsening their plight.
Farmers may rejoice. The government has finally acknowledged that farmers are part of India, that the farm sector faces acute distress, and that farmers need a helping hand. That is something which many commentators—especially Mr Ashok Gulati—have been saying for many months.
Farmers had taken note of the BJP’s failure to keep its election promise of offering a Minimum Support Price (MSP) of cost + 50%. I had pointed out that the increases in MSP in 2015-16 were paltry. Members of Parliament were aghast when Prime Minister Modi declared his contempt for MGNREGA that, according to him, was “a monument to the failure of the Congress governments”. Critics warned the government that the allocation to MGNREGA was inadequate. Surveys show that farm wages have risen only marginally in 2015-16 adding to the distress.
While the Prime Minister spoke often, and eloquently, on FDI, Make in India, and ease of doing business, he paid scant attention to the agriculture sector, leaving it, presumably, to the minister of agriculture. The latter, however, was neither seen nor heard and, after nearly 21 months in office, remains largely unknown. (He could take a few lessons from the minister of human resource development who has acquired a cult status among the ‘nationalists and patriots’, if not among the students and teachers.)
As a result, the label of ‘suit-boot ki sarkar’ stuck, and something had to be done. I suspect that is how the idea of a ‘pro-farmer, pro-rural India budget’ was born. Whatever be the motivation, I welcome the government’s move to address the problems of the agricultural sector.
I took the night train to Delhi to participate in budget-day discussions and my co-passenger, who boarded the train in ravaged Punjab, asked me a simple question: “50 farmers are committing suicide everyday; will the budget end farmer suicides?” My answer was — and still is — “No.” The Union budget is just the government’s bookkeeping exercise to balance revenue and expenditure. It is not the policy document it is projected to be.
Central budget allocations for agriculture are far less significant than the collective budgets of the states because agriculture is a state subject. While giving Aadhaar legal sanctity and linking it to welfare programmes is Parliament’s prerogative, it is in the states that implementation will actually take place and where every sharecropper and tenant’s name has to be recorded in the land records. These — and not the budget — will be the tipping points to achieving transformative rural change. The time for universally applicable, pan-India policy has passed. Less than 100 districts have 80 per cent of India’s poor and most of these are drought-prone. Funding has to be structured keeping this in mind.
Panasonic has developed a robot to harvest tomatoes, starting field tests with an eye toward eventual commercialization.
A miniature camera that captures more than 70,000 pixels is combined with an image sensor to identify ripe tomatoes by color. The robot picks them by the stem to avoid bruising and can work at times when humans are unavailable, such as at night.
When a basket fills up, the robot is notified wirelessly and automatically replaces it with an empty one. Yield and quality can be managed through data. The prototype can pick one tomato every 20 seconds or so, but Panasonic seeks to slash this to six seconds with improved sensors.
Panasonic has been applying its sensors and other technologies in the agricultural sector. It is making the jump to robotic farming at a time when Japanese farmers face a graying and shrinking workforce. The company is also considering using the machines at its own plant factories.
Russia slapped restrictions on agricultural and food imports from Turkey on Thursday, in an economic retaliation over the downing of one of its fighter aircraft by Turkey’s air force on the Syrian border.
Rosselkhoznadzor, the agricultural and food security watchdog, said all agricultural and food products imported from Turkey would be subjected to laboratory checks. Meanwhile, the consumer protection agency, Rospotrebnadzor, said it had pulled Turkish products, including meat and fruit, from shop shelves following health safety checks.
The moves came as the government said it was preparing a package of economic sanctions against Turkey. Dmitry Medvedev, Russian prime minister, instructed his cabinet to present proposals within two days on what other restrictions to impose.
Among the measures suggested by cabinet members on Thursday was closing Russian airspace and ports to Turkish companies, suspending an investment services agreement with Turkey, and suspending social and cultural exchanges.
Food import restrictions, which are often blamed on health code violations, are a time-tested weapon for the Russian government: After western countries imposed sanctions on Russia for its involvement in the Ukraine crisis, Moscow retaliated last year with an all-out ban on their food products.
The Japanese government is planning to draw up a supplementary budget for fiscal 2015, which ends next March, worth more than 3 trillion yen ($24.6 billion) but will not issue new government bonds to finance it.
The government will consider increasing the amount if it concludes more economic stimulus is needed after the release of July-September gross domestic product data on Nov. 16.
The bulk of measures in the supplementary budget will focus on two areas: promoting Prime Minister Shinzo Abe’s new initiative aimed at promoting the social engagement of all citizens and preparing for the Trans-Pacific Partnership trade agreement. Outlines of these measures are expected to be completed in late November.
Measures for promoting social engagement will include increased funding for comprehensive medical and long-term care in local communities. By improving nursing-care facilities and increasing the number of care providers, the government hopes to achieve Abe’s goal of reducing the number of people who quit their jobs to care for ailing family members to zero.
With rainfall below average across most parts of the country, the impact on the agriculture sector is making bankers nervous. The total exposure of banks to the sector has shot up to ₹8,07,800 crore from ₹7,20,400 crore in August last year.
With the India Meteorological Department pegging the monsoon deficit at 14 per cent below the long-period average, bankers are being forced to restructure some of these loans in a bid to keep non-performing assets (NPA) in check.
“There could be problems where the rain deficiency is over 20 per cent. It is also a State subject as to which region is declared drought zone and, accordingly, banks will have to provide for the restructuring,” said GK Kansal, Chief General Manager, State Bank of India.
Restructuring leads to renewal of loans by extending the tenure for the borrower, usually with a lower instalment amount. While this avoids immediate default of loans, lower returns hurt the lender.
The latest data show that some parts in northern and western India are reeling under an acute monsoon deficit. The deficiency in east and west Uttar Pradesh stands at around 46 and 43 per cent, respectively.
While the Konkan and Goa region face 31 per cent deficiency, central Maharashtra and Marathwada face a 32 per cent and 39 per cent deficit, respectively.
There are no maniacs at the Fed who want to crash the market. The Fed has the easiest ‘out’ of all time here. They hadn’t committed to a hike anyway and now the market has shown them what will happen if they turn off the easy-money taps.
Fed funds futures implied probabilities are still at a 22% chance of a hike but it should be zero.
At the same time, the PBOC has a tremendous amount of ammunition and I have little doubt they will use it.