Raghuram Rajan seeks abolition of farm loan waivers from election manifestos

Raghuram Rajan seeks abolition of farm loan waivers from election manifestos

News:

Former RBI Governor along with 13 economists, proposed an economic strategy to spur public debate and build political consensus around economic reforms that India needs to carry out in the next five years.

Important Proposals:

Abolition of farm loan waivers from election manifestos:

• The recently concluded assembly election in five states, agriculture loan waiver and increasing minimum support price (MSP) of cereals was again part of manifesto of some of the political parties.
• It not only inhibits investment in the farm sector but put pressure on the fiscal of states or center which undertake farm loan waiver.

• Recommendations:
  • Fixed cash subsidy per acre cultivated to address distress in the farm sector – To be done by digitizing and identifying plots as demonstrated by the Rythu Bandhu Scheme of the Telangana government, replacing costly, ineffective and distortionary price support schemes.
  • Improving access to land for development through computerized land mapping – The main aim is to computerise all land records, including mutations, improve transparency in the land record maintenance system, digitise maps and surveys, update all settlement records and minimise the scope of land disputes.
  • Government-guaranteed titling – Ownership of any immovable property or land that one owns, is guaranteed. The holders of such title are protected against any legal counter claims on their property.
  • The creation of land banks – Land banks are governmental entities or nonprofit corporations that are focused on the conversion of vacant, abandoned, and tax delinquent properties into productive use.
  • Auctions for land acquisition – To allow fair market value through competitive bidding.
  • To use the model of the GST Council for sharing best practices between the Centre and state, as well as for formulating national actions such as land titling reform.