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The DMK & Congress Farmer Loan Waiver Model for Tamilnadu: How farmers were fooled!
After coming back to power in 2006, DMK announced Loan waivers for all farmers. Total loans taken in 4000 Co-operative societies was ₹6526 Crore.
After coming back to power in 2006, DMK announced Loan waivers for all farmers. Total loans taken in 4000 Co-operative societies was ₹6526 Crore.
TN Finance minister in his iconic Budget Speech of 2007 said the waived amount of co-operative loans would be reimbursed to the co- operative institutions in 5 instalments with 8 percent interest to ensure the continued functioning https://tnrd.gov.in/Announcement_pdf/budgetspeech2007_2008.pdf
DMK did not pay the dues to Cooperative banks. They went to UPA asking for 5000 Crores funds. Central Govt showed them the door not wanting to set a bad precedence http://archive.indianexpress.com/news/centre-cold-shoulders-karunanidhi-s-loan-waiver-scheme/7755/
Early 2008, Banks still not paid their dues. Karunanidhi was still hoping centre will fund his electoral promise. https://www.google.co.in/amp/s/www.outlookindia.com/newswire/amp/karunanidhi-endorses-farmers-demand-for-loan-waiver/547449
To DMK’s favour, before the 2009 Loksabha elections, UPA announced Farm loan waivers of 60,000 Crores including the ₹6526 Crores committed by DMK in 2006. Point to note: Banks not paid yet https://www.google.co.in/amp/s/www.livemint.com/Politics/XeGU40jlsHGKrfwfJK1ccL/Govt-announces-Rs60000crore-loan-waiver-for-farmers.html%3ffacet=amp
After 7 years, in 2016, AIADMK announced Farm loan waivers of ₹6,095 Crores. Officials were shocked to notice 80% of loans waived off in 2006 appeared in the list. Neither did DMK nor Congress waive off loans. https://www.livechennai.com/detailnews.asp?newsid=26445&catid=29
When you don’t pay the bank, the bank cannot generate liquidity to loan again. This is how Agricultural output was killed in TN after 2006. It picked up only after 2017. If DMK says they’ll waive of loans, you know how it is now.
