My point, Sri, is that the Rs. 60,000 Crore is such a big amount that unless it is fully provisioned for, it would threaten the entire economy !!! It is more than the entire budget of 3 big States, taken together. And the Waiver has been a well thought out announcement by the FM and is not just a half-backed one.
We must go into the details of the Waiver Clauses and the earlier budgets of this government, before making any analysis. A lot of these money has already been written off from the books of account of the Banks due to the Change in reporting of Bad Debts that the RBI had dictated some 4 years back. The Banks were earlier showing these amount as assets in their Account Book. A part of it was the Debts of Farmers. You may recall, several small Banks went into Red immediately afterwards and the Government had paid a hefty amount to put them on track. And a part of this bad debt is being included in the waiver.
If we take out the Bad Debt, which in any way had already been written off, the net amount is quite manageable by the government.
And an analysis that ignores this fact, would never be a complete one. If the Government is to dole out such a huge amount, our entire economy will break down for sure.
So the hypothesis that analyzes as to what would happen if such a huge outlay is committed for a seemingly unproductive work, does not make any sense.
