FARM LOAN WAIVER

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Farm Loan Wavier

 

What has happened?

That were announced by the UP government on Tuesday [4 April 2017]:

  1. YogiAdityanath cabinet on Tuesday (4 April 2017) waived off loans worth Rs. 30,729 crore of small and marginalised farmers, who had taken a crop loan up to Rs.1 lakh each.
  2. Along with this, an additional Rs. 5, 630 crore was given to write-off NPAs of 7 lakh farmers of the state, taking the total form loan waiver amount to Rs. 36,359 crore.
  3. The UP government announced special measures to extend relief to wheat farmer.
  • The UP cabinet passed the proposal to open 5,000 new direct wheat purchase outlets with an aim to procure nearly 80.25 tonne of the grain – to rein in the blooming business of middle men, who often don’t let the benefit of MSP reach the farmers.

 

  1. Raise by Rs. 10 per quintal the MSP for wheat procurement as loading and unloading charges.
  2. The formation of a three – member committee was also announced to study how can the interest of potato farmers be accommodate and protected, who face immense hardship in case of bumper crops.
  3. Approval on the anti-romeo squad
  4. Approval the crockdown on illegal slaughterhouses.
  5. Need to build a sports complex in Ghazipur.
  6. Formulate a new industrial development policy to invite investment into the state.

 

Was the Waiver needed?

  • In the past, farmers in the state had suffered because of successive drought and hailstorm.
  • Rain-fed agriculture
  • Droughts due to El Nino,
  • Un-scientific farming practices.
  • 17% of India’s GDP = from Agriculture, problems faced by Indian Agriculture.
  • Yield risk
  • Price risk
  • No other sector can claim this level of uncertainty at almost every level of operation.

 

  • The risk of monsoon failure and infestations during crop growth.
  • The risk of lower prices after harvest.
  • Compromise in quantity and quality during storage and distribution.
  • Farmer suicides – according to census 2011, one farmer commits suicide every hour.
  • Increasing attrition rate in agriculture – 100 farmers are giving up agriculture every hour.
  • Distress migrations – causing burden on destinations (mostly urban areas).
  • Growth of unorganized credit sector-lack of access to organized sector lending many farmers resort to unorganized credit sector.

 

Paisa Kaha se Aayaga?

Fiscal burden = Stress on the exchequer

 

  • Since there is no central government assistance far waiver, Uttar Pradesh will have to find own resources to compensate the banks.
  • The loan waivers will cause an additional 36,359crore burden on the state coffers.
  • The yogi adityanath cabinet decided to float KisanRahat Bonds for raising Rs. 36,359 crore required for waiving off the loans as the fiscal Responsibility and Budget Management (FRBM) Act mandates that no state can allow its fiscal deficit to grow by beyond 3% of its GDP.
  • The state is already reeling under a debt of Rs. 3,27,470crore, the nation’s second most indebted state {acc. to a RBI’s state fiscal report up to 2016.}
  • The UP government must dedicate a mammoth one-third chunk of the annual state budget to the cause.
  • It could be difficult to handle the burden of loan waiver in a single financial year.
  • Loss of revenue from banning of slaughter houses.

 

The Politics and BAD Consequences of waiver

  • Can happen in extreme emergencies such a natural calamity.
  • But no definitely as a political tool to win elections.

 

Demand in other states

  • The UP waiver will immediately trigger demand for similar packages in other agrarian states like Punjab, Maharashtra and Tamil Nadu.
  • Already, in Tamil Nadu, the Madras high Court has
  • Asked the state government to waive loans of all farmers.
  • Restrained cooperative societies and banks from recovering their dues.
  • Wants the central government too to share the state government’s loan waiver burden.
  • Deterioration in credit discipline.
  • This is one reason bankers and the RBI has always vehemently opposed the idea of farm loan waiver.
  • Such a move will disrupt the credit discipline of borrowers.
  • “Today the loans will come back as the government will pay for it but when we disburse loans again then the farmers will wait for the next election expecting another waiver” the SBI chairman said.
  • Such compensations have never reached banks on time. It has only burdened the banks even more.
  • In 2014, farmer RBI governor RaghuramRajan asked “How effective these debt waivers have been?
  • Studies :
  • They have been ineffective
  • They have constrained the credit flow post waiver to the farmers.”
  • Once the banks system is shut for the farmer, he will then be forced to seek the assistance of the private moneylender, putting his life’s savings, land and honor at risk.
  • High exclusion errors in loan wavier scheme.
  • Misuse of taxpayer’s money – they honest taxpayer’s hard earned money is misused instead of channelizing the funds in enhancement of agriculture.

 

Why Yogi Adityanath’sRs. 36,359 Crore form loan waiver is not just good politics but good economics too.

  • For years, we have been made to believe that
  • Markets can regulate themselves lake decisions rationally, and doesn’t require government intervention.
  • Government should stop giving freebies (subsidies) to farmers and, of course, loan waiver is a complete no-no.
  • The move is pure politics and a very bad economics.
  • The move will inspire others to stop paying their dues to the banks, which ultimately discourage the latter from issuing loans to farmers.

 

  • There are two wrong assumptions in this argument:
  • It considers that humans don’t like to fulfil their responsibilities.
  • In rural areas, people tend to opt for loans when there is no option.
  • People mostly are fearful of the banks and no one wants to be harassed by banks.
  • Those claiming that form loan waiver is bad economics tend to treat agriculture at per with other industrial sectors.
  • Farmers of the country do not get benefits at per with industrial workers.
  • They have been a neglected lot for decades.
  • Investment don’t always have to be on physical infrastructure only.

 

The Solution = Steps that can be taken

  • Problems in Indian agriculture are structural they need long – term solutions.
  • Instead of waiving loans, governments and promise free supply of fertilizer, seeds equipment and warehouse facility.
  • Fresh funds can be made available on easier terms to the deserving farmers through nodal agencies such as National Bank for Agriculture and rural Development.
  • Restructure bad form loans before writing it off.
  • Crop insurance.
  • Pradhan MantriFasalBimaYojana
  • Improve the institutions:
  • Strengthening rural credit cooperatives
  • SHGs could act as source of credit.
  • Massive investment in area such as irrigation, water conservation, better storage facilities, market connectivity and agricultural research.
  • Improve yields + combat the vagaries of rainfall and temperature + Better prices for its produce.

CHENANI – NASHRI TUNNEL

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tunnel

Prime Minister Narendra Modi on Sunday (2 April 2017) inaugurated Chenani – Nashri Tunnel, Country’s Longest road tunnel that links Kashmir Valley with Jammu by on all – Weather route.

 

Place

 

  • Is located at an altitude of 1,200 meters (nearly 4,000 feet) in difficult Himalayan terrain.
  • Bores through the belly of the lower Himalayas between Chenani in Udhampur district and Naashri in Ramban district.
  • Is a road tunnel in the state of Jammu and Kashmir on NH-44 (former name NH1A before renumbering of all national highways).

 

National Highways 44

  • NH-44 is the longest-running major north-south National Highways in India.
  • It starts from Srinagar and terminates in KanyaKumari.
  • The highway passes through the states of Jammu & Kashmir, Punjab, Haryana, Delhi, UP, MP, Maharashtra, Telangana, AP, Karnataka and Tamil Nadu.
  • NH-44 was laid and is maintained by central Public works Department (CPWD).
  • It is the longest national highway in India.
  • Chenani – Nashri Tunnel which was inaugurated by Prime Minister of India, Narendra Modi on 2 April 2017, is a significant addition to this highway.
  • It has come into being by merging seven previously differently numbered national highways in full or part starting from.
  • Former NH-1A from Srinagar in Jammu & Kashmir.
  • Former NH-1 in Punjab and Haryana ending at Delhi.
  • Part of former NH-2 starting from Delhi and ending at Agra.
  • Former NH-3 (popularly known as Agra Bombay highway) from Agra to Gwalior.
  • Former NH-75 and former NH-26 to Jhansi and finally
  • Former NH-7 via Nagpur and Adilabad, Nizamabad, Hyderabad and Bangalore, Dharmapuri, Salem, Tiruneluli and Madurai terminating at Kanaykumari.

 

Details:

  • The work was started in 2011 and has been inaugurated on 2 April 2017.
  • Length : 9.28 Km (5.8 mi)
  • Passes through: the lower Himalayan mountain range on Jammu – Srinagar National Highway 44.

 

Other Name – Patnitop Tunnel

 

Owner – National Highways Authority of India (NHAI)

 

  • It is the first tunnel in the country with a fully integrated tunnel control system.
  • Built at Rs. 3,720 Crore.
  • The tunnel will reduce the distance between Jammu and Srinagar from 41 Km to 9.2 Km
  • 1,500 engineers, geologists, skilled workers and labourers worked on the project.
  • 6,000 LED multiple colour lights will be used to break monotony.
  • GSM phone will work inside the tunnel. 118 SOS boxes have been set up, on every 150 meters on both sides.
  • BSNL, Airtel and Idea have set up facilities inside the tunnel to carry signals.
  • 118 CCTVs, one every 75 metres.
  • At 50 Km/hr. speed the tunnel is a 12 to 15 minutes drive.
  • Comprises two tubes and 29 cross – passages, with special lane for exigencies
  • Vehicle distance to be maintained at three metres.

 

Technologies:

  • Incorporates India’s first fully integrated mechanism to externally control everything
  • from the movement of vehicles.
  • to the inflow the outflow of air, and
  • even the evacuation of passengers or vehicles in distress.

 

  • 92.7 FM is mandatory for vehicles where emergency will be relayed.
  • Video surveillance System.
  • FM Rebroadcast System.
  • Entrance Detection control System.
  • Active firefighting System.
  • Smoke and heat dampeners will react quickly in fire incidents.

 

  • The heat detection system will record rises in temperature in the tunnel – result perhaps, of excessive emissions from on or more vehicles, in such, the ITCR will get in touch with staff inside the tunnel, and the offending vehicle will be pulled over into a lay-by and subsequently removed by a crane through the parallel escape tunnel.
  • Air quality monitors every 12 meters will keep a check on carbon dioxide and carbon monoxide, guiding exhaut fans and air purification.
  • Automated integrated Traffic control system
  • Will monitor traffic round-the-clock and
  • Overheated vehicle will be made to stop for cooling off.
  • It also features a state-of-the-art ABB ventilation system to ensure the users have access to fresh air as they drive through it.
  • ChenaniNashri tunnel is the country’s first – and the world’s sixth-road tunnel with a transverse ventilation system.
  • Fresh air coming into the main tube will push vehicle exhaust upwards and into the other tube; exhaust forms in the parallel escape tunnel to will such stale air from the main tube and throw it outside.
  • To prevent diminution of vision as a result of change in the light while going in or coming out of the tunnel the lighting inside have been adjusted a gradient of luminous strength.
  • Despite having excavated in a difficult Himalayan region, both tubes are 100% waterproof.
  • There will be no seepage of water from the ceilings or any of the walls of the tunnels.

 

Importance

  • The tunnel reduces the distance between Jammu and Srinagar by 30.11 Km (18.7 mil and cut travel time by two hours.)
  • The all-weather tunnel bypasses snowfall and avalanche prone areas in winter at places like patnitop, kud and Batote that obstruct NH-44 every winter and cause long queues of vehicles – sometimes for days at length.
  • The tunnel, bypassing snow-bound upper reaches, will reduce the journey time by two hours and provide a safe, all-weather route to commuters travelling from Jammu and Udhampur to Ramban, Banihal and Srinagar.
  • 27 lakh fuel savings a day
  • Serve as an alternative to the highways which is closed at the time of snow and rains.
  • It will help to boost the trade and commerce and tourism in the valley.
  • It will reduce traffic jams on National Highway 1A.

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ias

VEDANTA IAS ACADEMY is India’s well-known best ias academy in delhi,Top ias coaching Institute in delhi preparing candidates for the Civil Services Examination at all the three levels – Preliminary Test, Main Examination and Personality Test.The Institute is a unit of VEDANTA GROUP OF INSTITUTIONS and was founded in 1997 by Mr. S. P.  Verma who is well known Scholar and Social worker.

Since its inception the Institute has helped over good strength of students to enter the Civil Services including I.A.S., I.F.S., I.P.S. and States Civil Services.

Every year some of our students have secured positions top rank among successful candidates. The teaching faculty of the Institute has been drawn from highly qualified and experienced teachers of the various reputed Institutions from India and abroad.
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