Reason for Naidu underestimated loan waiver!

Did Chandra Babu Naidu underestimate the cost incurred in Loan Waiver? How could an experienced politician like Chandra Babu promised a waiver worth more than the annual budgets of majority states in India. Senior Banker and Andhra Bank CMD, CVR Rajendran says Chandrababu went by historical numbers. In an interview to a National economic website, Rajendra opined that Chandra Babu only had the last time figures 7000 Crore waiver across the country and underestimated that the waiver may cost him 10000-12000 Crores. But once the figures were pegged at 1,21,000 Crores, he could neither execute it nor politically go back on the promise”.

With the capping of the loan amounts to 1.5 Lakhs per family, Chandra Babu managed to lower the Loan Waiver burden to some 50000 Crores which is also big provided the financial crunch the state it is in. He is exploring several options like giving bonds, selling Red Sandals lying in Government godowns etc.