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Aarti Gupta
Aarti Gupta has recently completed her Ph.D. in economics from Indian Institute of Technology (IIT), Kanpur. Her fields of interest include issues in developing economies with a special focus on India. Her current research concentrates on public-policy making with an emphasis on government intervention in the working of credit markets through debt waivers. She holds a Master’s degree from Northeastern University, Boston and a postgraduate diploma in business studies from Harvard University. In addition to this she is an active angel investor offering her support to a curated list of startups in helping them grow and become successful.
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Hazards of farm loan waivers
In theory, debt waivers are expected to induce the optimal level of effort from the debtor for loan repayment. However, repeated waivers may distort household expectations about credit contract enforcements in the future. This column analyses the effect of Uttar Pradesh’s state-level debt waiver programme – announced right after India’s nationwide Agricultural Debt Waiver and Debt Relief Scheme – on consumption and investment behaviour of households.
