The definition of “Loan Waiver” and “Loan Write-off” may be different in dictionary – but both are technically the same. Both are bad for an economy, however they are perceived pretty differently by the common man. The first one is a Pro-active action taken by the Govt based on electoral promises to garner votes, whereas the other one is forced on the State machinery and is reactionary in nature. Unfortunately, the first one is considered “sacrosanct” and a benevolent step by any political party, whereas, the other one is considered unhealthy development and criminal in nature. Is it not surprising?

If someone were to ask any learned economists, s/he would opine that both steps are extremely bad, and if someone were to dive deeper – s/he would suggest that the first one takes is more ruinous for its “After effects” on the economy. Then how come, our policy makers don’t understand – Well they are servants of their political masters and seem to have decided to follow the path of Gandhism..

“Everyone wants to live on the expense of the State whereas the State lives on the expense of everyone” – brilliantly put across by Mr. Frederic Bastiat, but hardly understood by our policy makers and state heads.

Let us try to understand this a little –

#“Loan Waivers” are an incentive to Default – (this statement itself is standing inverted if seen Logically). It also gives legal sanctity to frustrate & murder the idea of being an honest borrower – a retrograde principle in economic growth. Such waivers over time, become entitlements, further prompting good borrowers to turn bad. A complete failure of Economic logic at the basic level.

“Loan Write-offs” – though bad, are not entitlements but are forced upon the system due to non-recovery. Such write-offs are not entitlements. They also have penal provisions on the defaulting borrower as per the law of the land – which some might argue to be unrealistic in Indian context, but Rules around such defaults are only becoming stricter & stronger by the day.

How does the law, then not criminalize the first one, namely the “Loan Waiver” – at least equally as Loan write-offs? Why does the system see both with different set of eyes? Why does the Judiciary remain silent on this insane step widely used by almost every political party to garner votes? Such “Loan Waivers” are no different than “Loan Defaults” done by the likes of Mallya’s & Modi’s – then why aren’t these policy makers / heads of the state who conveniently announce such waivers be brought to books? Greed to power is so much ingrained in our politicians that they simply refuse to see beyond their term of power on the disaster unfolding over the economy due to such steps. And the most intelligent bureaucrats / the policy makers also seem to conveniently throw their own sense of wisdom out of the window – showing their utmost loyalties to their political masters..After all the funds of the nation are scarce and can’t be blundered like this.. Some one has to take the responsibility.

And all sympathies go towards the tax payer of this country – the mere 2% of the population which has to foot the bill for such insane steps. The citizens need to wake up and raise their concern before such steps become the order of the day..

May God Bless India….(and save from such greedy politicians)…