2018
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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600
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500
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400
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350
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Detailed explanation-1: -In a farm loan waiver scheme, the Centre or the state Government repays the loan to the banks on behalf of the farmers, simply by using public money collected in the form of taxes. When there is a poor monsoon or natural calamity, farmers cannot repay their loans.
Detailed explanation-2: -Reputational Consequences: Loan waiver schemes will disrupt credit discipline as farm loan waivers may act as a temporary solution and can prove to be a moral hazard in future. This is because those farmers who can afford to pay their loans might not pay it expecting a waiver.
Detailed explanation-3: -Farm loan waiver The first FLW at the national level was announced in 1990 when then prime minister VP Singh waived off ₹10,000 each, and the second country-wide scheme came in 2009 by the United Progressive Alliance (UPA I) government.