Coming out strongly against instances of the populist debt waiver announcements, a senior RBI official on Tuesday said they are inimical to the repayment ethic and are deleterious to the present climate.
"On farm loan waiver issue, you know I have been on a hand-to-hand combat (mode) with the Andhra government. I said no! No! No," RBI Executive Director Deepali Pant Joshi told reporters on the sidelines of an industry conference here, when asked about the progress on debt waiver issue."Debt waivers do not work. Subventions do not work. They are inimical to the repayment ethic and are deleterious to the present climate," she said.Chief ministers of Telangana and Andhra Pradesh had promised during their election campaigns that if elected to power, they would write off loans to farmers worth over Rs 1.3 trillion after they claimed that crops were damaged by Cyclone Phailin last year.