Few days back West Bengal Chief Minister Mrs. Mamata Banerjee formulated a policy that if the farmers were not able to pay back their bank loans in time, even then the banks will have no right to the farmer’s property – in other words:
West Bengal Chief Minister Mamata Banerjee said that her government would amend the West Bengal Co-Operative Societies Act, 2006 to ensure that banks run by cooperative societies were not empowered to attach the property of any farmer who fails to repay a loan.Reacting strongly to certain posters that have appeared in the Tamluk area in the State’s Purba Medinipur district, Ms. Banerjee said: “We will ensure that without the permission from the government, no one can take away or auction the property of any farmer. And the stand of our government is that we will never allow such auction.”
The above extract is taken from The Hindu. After what happened to Mr. Dinesh Trivedi on the Railway Budget issue, things look dim for the banks as well. Here’s a couple of reasons why I say so:-
- Farmers with this kind of state protection will not try an iota to pay back their loan, even if they perhaps could have. They know that after the recent announcement of Mrs.Bannerjee, the banks cannot force them to either repay their loan, or threaten them of auctioning their property. Well at ease, the farmers can temporarily forget the fact itself that they have to repay a loan.
- The lending power of banks will be handicapped in this case. One knows that the system of lending-repaying is something which is not child play to be handled, and interference with that for someone (who is no where near being an economist) is nothing less than playing with fire. Mrs.Bannerjee’s concept of “Maa-Mati-Manush” is now becoming a threat to our already-deceased state of West Bengal. Mamata cannot put her party and electoral selection above our state – all she wanted to do by applying this policy was wining the hearts of the farmers, but she is certainly not entitled to do so by looking down on West Bengal’s economy.
- Finally, if this is what the West Bengal Govt. had wanted, they should’ve made arrangements from their coffers to re-pay the loan on the farmer’s behalf. Nothing as such has been announced yet, this is not what any state-finance minister would want. All that has been done by this recent announcement is restricting the role of banks in the economy, I hope all of us are well-versed with the fact that West Bengal is not a state to boast about her economy in the country, and implication of such a policy in this state doesn’t look very good.
When we read such incidents as the farmers committing suicides burdened under financial debts, we can barely do anything except feeling sorry for them. So at first glance, this strategy looks decent from the farmer’s point of view, but we have to keep a balance with the lending stocks as well. I don’t have much idea as to what exactly could be done, but here’s some information that I had – Few days back Mamata Bannerjee had donated 16 crore Rupees to each of 800 Football Clubs. Fine – but if you apply such policies on the other hand, any rationale human being would suggest that an additional feature be inculcated in the policy – bank loans would have to be re-payed by the state if the farmers aren’t able to do so, without exception. Otherwise a policy which in a way suggests autocracy of the farmers over the banks, looks very very dangerous indeed.