Jaitley says states free to announce farm loan waiver if they have the fiscal space: report

Finance Minister Arun Jaitley, in an exclusive interview with Business Standard, said that states had the freedom to announce farm loan waiver if they had the fiscal space.

However, he remained non-committal on the question of a national farm loan waiver scheme as the Centre was facing a tight fiscal deficit situation, said the BS report.

“If some state governments give a call for a waiver of loans, and if they can afford it, they can go ahead. But they must keep in mind that if the farmer stops paying, the state has to pay,” Jaitley was quoted as saying in the report.

On the challenges faced by the economy, as mentioned in the report, the minister pointed towards the agrarian sector and said that the real challenge would be between making investment in that sector and making agriculture remunerative. He also added that the country is still struggling between populism and policy.

According to the report, Jaitley also expressed concerns over the weakness in telecom, aviation and real estate sectors.

When asked about the recapitalisation process taking place in the banking sector, he said that it is being conducted with the aim of preventing banks from slipping into the RBI's Prompt Corrective Action regime.