“The small farmer is forced to approach the moneylender because institutional credit given by banks, especially cooperatives, takes too much time to be sanctioned. In crises or emergency situation, or when small amounts are to be borrowed, the moneylender is easily available,” says Vinay Hardikar, national secretary of the Swatantra Bharat Party. “Also, banks do not give loans unless earlier loans are repaid, and the farmer is often already a defaulter.”

With recent Reserve Bank of India Trend and Progress data also suggesting that total overdues by small farmers to commercial banks, cooperatives and RRBs is not likely to exceed Rs 23,000 crore, experts have said that those unaddressed by the loan waiver should be a cause for worry.

“Even though a loan waiver is the neatest means of providing income to the farmer, the government needs to worry about the 75 per cent that it has left out,” says Rajiv Kumar, director and chief executive, ICRIER. “The issue of small and marginal farmers having little access to credit is not going to be solved by such a measure. The basic problem of a largely unremunerative and unviable agricultural economy can only be addressed by fundamental policy changes.”