India Budget 2008 - Is a moral hazard ?

No one can deny the charismatic appeal of the India Budget. As soon as the Parliament's Budget Session started, each and every news channel interviewed people ranging from entrepreneur to CEOs to housewives and to college grads and telecasted their expectations from the budget. This time the Finance Minister put the elections in the top leaving the rest underneath it.

The usually affected salaried class were more beneficial this time (a great relief of ~20K for a middle class individual tax payer), and around 40 million farmers getting benefited by the loan waiver of Rs.60,000 crores (A huge money).

I personally think that this waiver should be a setback for the productivity. Instead of waiving it off, they would have given consideration for small or zero interest rate, in which case the people would have valued the money lent.

Now, do the farmers who had paid some part of the same either by selling their lands or some assets reap any benefit from this?

This waive off will definitely affects the moral of the farmers who had the intention of paying the loan back. Now people will back off from paying everytime either expecting or demanding the government to waive off the loan in future.

If atleast part of this loan has been recovered, probably it would have yielded some more relief to all tax-payers either individual or corporate. Isn't true?

I am not against any benefit or relief scheme however Nothing will be valued if provided free is what I think.