Some important excerpts:
Agricultural investment in India is a big gamble. Farmers usually take out bank loans against land to buy seeds and fertiliser, pay salaries, and acquire irrigation equipment.
Local moneylenders often take the place of banks and boost interest rates year after year, creating a debt-trap for the farmers who rely on crop success - and prayers - for loan repayments.
Is there a way to regulate these local money lenders? The loans should be insured, not collateralized. However, if the debtor approached a regulated bank, he probably won't qualify, which is why he was forced to approach a private money lender.
One solution is to get these farmers to lease out their land to other entities. Now, the question is, is there at all a demand for his land?
Assuming there is indeed demand, it should be possible for the farmer to lease out his land to someone who is willing invest in that land without risking his own life.
Assuming there is no demand, why is his land even subject to auction?
She said the government of Prime Minister Narendra Modi promised to pay $1,570 in compensation to the families of farmers who committed suicide, but that doesn't come anywhere close to covering the bills.
"Ours is a debt-ridden family now… The banks will auction off our land … our cattle and this house," she said. "The Modi government has not helped us. But if he [Modi] wished, he could waive our loans."
Is it true that is the debtor dies, the debt is transferred to his kith and kin? The land might have been in the name of the farmer who died, but there should be a safeguard against eviction and appropriation, since, the land is the only livelihood of the family. It is time to see whether Modi is a people's politician (as one eponymous thread title suggests), or a banker's politician.
The last decade witnessed high overall growth rates for the Indian economy, leading to large-scale job creation in construction, manufacturing and the services sector. Between 2004-04 and 2011-12, an estimated 37 million people were pulled out from farms. “This (movement of labour from agriculture) had never happened before in India’s history. But it also gave rise to labour shortages in the countryside, which in a way also spurred greater mechanisation of agricultural operations”, notes Gulati.
I believe it was
@Mad Indian who argued that is a person leaves a certain job, there will be someone else ready to take his position, and the person who leaves the job, will be able to find a better job. This, however, leaves out one aspect. If there is lack of supply of labour forcing people to buy tractors, then why are some people not taking up the job of a labourer, and instead, taking loans, and sometimes, committing suicide? Is it true that the lack of labour supply and debt-trapped farmers are geographically skewed?
Industrial production numbers have sounded alarm bells for consumption demand. In 2014-15, consumer goods production fell 3.42%, the sharpest fall since the data became available from 1991-92. This was the second straight year of a fall.
Economy cooling?
Weak consumption demand translates into some relief on inflation. Overall, consumer price inflation decreased to 4.9% in April from 5.3% the previous month.
If there is less demand for consumer goods, then the price of consumer goods will fall. Which means the value of each currency unit goes up (or in this case, does not dwindle as much as it is expected to).
Overall, all I can say is that the theory of "trickle down effect" is not working satisfactorily. The government needs to stem this disaster in the making. This is fertile ground for an uprising.