Loan-waiving for ‘bullock-capitalists’: policies and politics

The politics over and around the ‘bullock-capitalists’ has once again reached the centre-stage of Indian and state level politics as well in many states.

The term ‘bullock-capitalist’ was conceptualized by noted American authors Rudolph and Rudolph by highlighting the pitiable economic conditions of small and marginal farmers across India.

Rudolph and Rudolph argued that the small and marginal farmers have the ‘capital’ which is equivalent to sustain two bullocks only!! And, they continue to run the farming activities with this meager amount over the years.

As a result, the ‘bullock capitalists’ across the country have been languishing in severe distress despite many innovative policy initiatives.

The spark around the issue has started with the waving off of loans of farmers to the amount of Rs 37,000 crores by the new BJP Government in Uttar Pradesh led by Yogi Adityanath.

In addition, toeing of the same line by waiving off loan of an amount of Rs.8000 crores the Maharashtra Government led by BJP’s Devendra Fadnavis has also added fuel to the issue.

Moreover, the warming up of the Odisha government led by Naveen Pattanaik’s BJD (Biju Janata Dal) to the proposal of waiving off of farmers’ loans has provided momentum to the extremely sensitive issue.

The farming community requires easy credits in the early monsoon every year to initiative the agriculture process. The farming community, by and large enters into an informal credit agreement with the ubiquitous money lenders with a very high interest rates.

The absence of hassle free alternative sources of credit makes them vulnerable to the money lending class. The important question here is the failure of Indian state’s proactive and timely interventions which can help alleviate the ‘bullock capitalists’.

Odisha is going to be another state which is likely to enter the political game of waiving off loans of farmers as the state has been facing criticism for the agrarian crisis.

Even it attracted the attention of the Union government and the Prime Minister Mr Modi addressed the members of farming community in February 2016 in Bargarh in western Odisha.

Coming straight to the political-economy of the loan waving of farming community in Odisha, crop failure and indebtedness have been the two major reasons for the distress faced the ‘bullock-capitalists’ in Odisha.

As per an official estimate more than Rs 19,000 crore farm loan is due from nearly 34 lakh farmers in Odisha. Out of this Rs 12,000 crore is owed to different cooperative banks and nearly Rs 7,000 crore to commercial banks.

The state government has taken few steps by providing financial assistance trough its own schemes.

The state government disbursed Rs 4500 crore crop loan in 2015 and Rs 6000 crore in 2016.The state government has so far provided Rs 19000 crore to farmers of which Rs 12000 crore was provided by various banks.

On the political platform, the BJD government which has been ruling the state for last 17 years uninterruptedly has suffered major political set back in the recently concluded elections to District Panchayats.

The BJP has been able snatch away the seats where the ruling BJD has had a strong presence.


Especially, the loss of BJD in the agrarian crisis affected districts may force the BJD top leadership to announce few sops to farming community which may reestablish the lost contact during the last Zilla Parsihad election.

In addition, the upcoming national executive meeting of the BJP in Odisha’s capital Bhubaneswar has also forced the ruling BJD to rethink its political strategy.

Especially, as the Prime Minister Mr. Modi is scheduled to stay in the state and address the party functionaries, the BJD intends to counter it by few politically popular measures with respect to agrarian distress.

Going by the history of the political-economy of loan waivers in India in last one decade, the UPA government was the prime beneficiary.

The UPA came back to power with the intact popularity after the Rs 70,000 cr loan waivers announced in 2008.

Though, the agrarian crisis requires cheap and hassle free availability of the institutional credit, availability of market and competitive price for agri-products, insurance etc.; the loan waivers help a large section of crisis ridden agrarian community immediately.

A long term multi-prong strategy to deal with the prevalent agrarian crisis must follow the waiving off farm loans to bring back cheers on the faces of the ‘bullock capitalists’.
*The author analyses policies and can be reached at [email protected]. Views expressed are personal.

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