Debt and Despair: Report Highlights 48 Farmer Suicides Daily, Calls for Urgent Financial Reforms
New Delhi – In a stark revelation underscoring a deepening agrarian and financial crisis, a leading borrowers’ rights body has reported that an average of 48 farmers commit suicide every day in India, primarily trapped by insurmountable debt. The All India Financial Borrowers Federation (AIFBF) has issued an urgent appeal to the central government for comprehensive, borrower-friendly reforms to stem the tide of tragedies and bolster the national economy.
The alarming statistic was highlighted by AIFBF Chairman and Managing Director, Dayananda, during the organization’s ‘Empowerment and Awareness Programme’. He attributed the crisis to lending practices where “the collateral sought by the banks is much more than the loan given and the interest rate is exorbitant, leaving the farmers and other borrowers in a debt-trap.”
A Call for Borrower-Centric Banking Reforms
The AIFBF has submitted a memorandum to Prime Minister Narendra Modi, advocating for systemic changes that would make credit more accessible not only to farmers but also to women entrepreneurs and startups. Dayananda argued that such reforms are critical for India to achieve its ambitious $5 trillion GDP target.
“The interest rate is among the highest in the world, at about 16%, which makes availing a loan and repaying an unviable proposition,” Dayananda stated. He contended that financial institutions would see improved repayment rates and a reduction in non-performing assets (NPAs) if they adopted a more viable perspective for the borrower, instead of levying high interest rates and exorbitant penalties that often lead to default.
Borrowers as Nation Builders Face Systemic Hardships
Echoing the need for a supportive financial ecosystem, M.G. Balakrishna, President of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), underscored the vital role of borrowers as the engine of India’s growth. He described them as “nation builders, job creators, and taxpayers.”
“Every great enterprise begins with trust, with credit, and with the belief that borrowed capital can be transformed into productive wealth,” Balakrishna said. However, he highlighted the persistent hardships faced by borrowers, including “arbitrary decisions, lack of timely revisions, prolonged litigation, harassment, and unequal treatment before the law.” He noted that “many sincere entrepreneurs are trapped in financial distress through no fault of their own.”
The FKCCI officially endorsed the efforts of the AIFBF, commending it for raising a unified voice on behalf of India’s estimated 75 crore borrowers. “When borrowers are aware of their rights… real change is possible,” the FKCCI observed.
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Closing the Trade Gap with Competitive Credit
Providing a macroeconomic context, AIFBF’s Dayananda pointed to India’s significant trade deficit with China. “We are importing Rs. 10 lakh crores from China, we are exporting 1.5 lakh crores and the deficit is Rs. 8.5 lakh crores. If we need to close the gap, the manufacturing sector has to be given easy interest loans and other incentives,” he argued, positioning competitive credit as a key to boosting domestic production.
A Unified Front for Borrower Protection
The event also saw calls for a collective support system for borrowers. Former Police Commissioner of Bangalore, Bhaskar Rao, emphasized that borrowers require robust support from chartered accountants, advocates, and organizations like the AIFBF to protect them from harassment and undue penalties by financial institutions.
The programme, which was also attended by FKCCI President-Elect Uma Reddy, concluded with a consensus on the imperative for collaborative action between industry bodies, civil society, and the government to create a fair and growth-oriented financial landscape.
Key Quotes on the Crisis and Reforms
By Dayananda, Chairman & Managing Director, All India Financial Borrowers Federation (AIFBF)
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On the Core Problem: “The collateral sought by the banks is much more than the loan given and the interest rate is exorbitant, leaving the farmers and other borrowers in a debt-trap.”
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On Interest Rates: “The interest rate is among the highest in the world, at about 16% which makes availing a loan and repaying an unviable proposition.”
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On the Economic Vision: “If India has to achieve $5 trillion GDP target, it has to bring in largescale financial reforms.”
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On the China Trade Deficit: “We are importing Rs. 10 lakh crores from China… If we need to close the gap, the manufacturing sector has to be given easy interest loans and other incentives.”
By M.G. Balakrishna, President, Federation of Karnataka Chambers of Commerce and Industry (FKCCI)
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On Borrowers’ Importance: “Every great enterprise begins with trust, with credit, and with the belief that borrowed capital can be transformed into productive wealth.” He underlined the vital role of borrowers, calling them “nation builders, job creators, and taxpayers.”
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On Systemic Challenges: “Many sincere entrepreneurs are trapped in financial distress through no fault of their own,” facing “arbitrary decisions… prolonged litigation, harassment, and unequal treatment before the law.”
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On the Role of AIFBF: “When borrowers are aware of their rights, when they understand the framework of law and finance, and when they stand united under organizations like AIFBF, real change is possible.”
By Bhaskar Rao, Former Police Commissioner of Bangalore
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On Needed Support: “The borrowers needed all support, from Chartered Accountants, advocates and organisations such as AIFBF to protect them from harassment, undue penalties by financial institutions.”
