The law behind the politics of rural debt and farmers’ suicides in India

[Abstract] There is incontrovertible evidence that the inability to service agricultural debts is forcing Indian farmers to commit suicide. However there has been no serious examination of the law relevant to rural debt. In colonial India, reactionary debt relief law was enacted in tandem with the preeminent governance consideration of optimal revenue collection. Rural indebtedness was a central theme of India’s freedom movement; but, after Independence, bank loans to farmers were shielded from anti-usury law. To redress this, the States’ power to legislate in relief of rural indebtedness must also extend to bank debts. While the States’ are unable to legislate to protect farmers, the Reserve Bank of India must exercise its supervisory power to place limits on the rates of interest that may be charged on agricultural loans.