Engaging India is an online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world. Engaging India appears on Thursday mornings exclusively on FT.com India, a dedicated online section on India, and is written by Jo Johnson, the Financial Times’ South Asia bureau chief; Amy Yee, New Delhi correspondent; and Joe Leahy, Mumbai correspondent.

As India’s politicians gear up for a general election, competitive populism is the only game in town. The ruling Congress party, which must seek a new electoral mandate within 15 months, has played a high-value card early, announcing a $15bn loan waiver for small farmers. The centrepiece of next year’s budget, the write-off is a present to a key voter group, the 40m farmers who are in default on loans taken out with state-owned banks and other institutional lenders. The scheme will cost the equivalent of 1.2 per cent of gross domestic product and will be implemented by the end of June, giving the government the option of an early election in the autumn.