the constraints. consequently, considerable flux in output and prices is common, imposing large losses on farmers and potentially imprisoning them in a circle of indebtedness with disturbing frequency. therefore, in the absence of coordinated and sustained efforts to put in place elements of a virtuous cycle of upliftment, loan waivers have periodically emerged as a quick fix to ease farmers ’ distress. 5. earlier, the union budget 2014 - 15 had put in place a scheme under which five lakh joint liability groups of ‘ bhoomi heen kisan ’ ( landless farmers ) will be financed through the nabard in order to augment flow of credit to landless farmers cultivating land as tenant farmers, oral lessees or share croppers and small / marginal farmers as well as other poor individuals taking up farm activities, off - farm activities and non - farm activities. the experience of catalysing bank credit flows to agriculture and expanding the panoply of subventions begs the question : are we substituting credit for other policy interventions? indeed, this issue prompted, in 2014, rbi ’ s expert committee to revise and strengthen the monetary policy framework to recommend a revisit of the need for subventions on interest rates for lending to agriculture. 7. a brief history of farm loan waivers in india may be in order. the first major nationwide farm loan waiver was undertaken in 1990 and the cost to the national exchequer was around 10, 000 crores, which works out to 50, 557 crores at current prices using the gdp deflator. the second major waiver was under the agricultural debt waiver and debt relief scheme ( adwd ) of 2008 amounting to 52, 000 crores ( 0. 9 per cent of gdp ) or 81, 264 crores at current prices using the gdp deflator. unlike the 1990 scheme that aimed at providing blanket relief to all farmers up to a certain loan amount, the 2008 scheme waived debt for certain classes of cultivators1. in 2014, andhra pradesh and telangana announced farm loan waiver of 24, 000 crores and 17, 000 crores, respectively. beginning with tamil nadu in 2016, domino effects have spread in 2017 to several states and the total cost of loan waivers announced amounts to around 1, 30, 000 crores ( 0. 8 per cent of gdp ). i am sure that the proceedings today will dwell upon the details characterising each scheme. therefore, i will move

prolonged low global demand, and adverse feedback loops between the real economy and financial markets may engender the global economy fall into deflation. 12. the global risks of deflation are clearly much more pronounced than before, whose vicious and self - reinforcing dynamics ― in the form of higher real interest rates, falling nominal gdp, and rising unemployment ― are notoriously difficult to combat once they become deeprooted. ladies and gentlemen 13. notwithstanding headwinds from ( i ) the taper tantrum episode in 2013, ( ii ) the economic slowdown in china, ( iii ) the continued fall in commodity prices, ( iv ) the normalization of us interest rate policy, and ( v ) the increased volatility in global financial bis central bankers ’ speeches markets, the indonesian economy has thus far held up well, emerge with its economic standing intact, standing out among the fastest growing and stable emerging economies. 14. certainly, this has been made possible owing to mix of prudent and consistence monetary and fiscal policies, exchange rate flexibility – while managing to enact a comprehensive set of bold reforms, which mutually reinforce each other to bring in macroeconomic stability while nurturing stronger growth. 15. growth has continued at a solid pace and remains among the highest in emerging market. private consumption remains solid with domestic demand compensating for the slowdown in the external sector. 16. inflation is well contained at 3. 35 percent ( yoy ), which is within the target of 4±1 percent for the year. well - managed inflation expectations, lower exchange rate passthrough, and a small negative output gap, have all contributed to lowering core inflation. 17. indonesia is convincingly in an era of structurally lower inflation, in my view. this was evidently reflected from the trajectory of consumer price inflation ( cpi ) which have been converging towards core inflation. 18. the stability over growth strategy demonstrated in monetary policy tightening since mid - 2013, fuel subsidy reform, and greater exchange rate flexibility, have helped improve the external position. in 2015, the current account deficit falling to a healthy level at 2. 06 percent of gdp, from – 3. 00 percent of gdp in 2014. 19. furthermore, international reserves continued to be sufficient at us $ 105. 9 billion as of end - 2015, which is equivalent to 7. 45 months of imports and official debt repayments. ladies and gentlemen 20. going forward, indonesia ’ s economic outlook remains solid