India needs to focus on resolution of farm distress rather than loan waivers which kill the credit culture, former RBI governor Raghuram Rajan said Tuesday.

"First we need to worry about why people are so distressed and angry. There is a lot of agriculture distress. I personally believe that farm loan waivers are not the answers. But there are other answers," he said when asked about what should be the focus for the upcoming elections.

The other focus area should be creation of jobs which the people want, he said here at the launch of his book -- 'The Third Pillar - How Markets and the State leave the Community Behind'.

"I would say that one is start creating those jobs people want. Take care of the distress, but whatever measures you put, put them as a pathway for people to get those jobs rather than standing in the way of getting those jobs...We can talk about the economic reforms that are needed, but jobs are task one," Rajan emphasised.

Several state governments have announced loan waivers for farmers.

Referring to the issue of farm distress, he said loan waivers cover only those farmers who have taken loans from the formal system.

"I do worry about waiving loans because it only targeted to those farmers who have taken loans from the system, not the poorer farmers who have loans from the money lenders or an agricultural worker who never got a loan in the first place. So I would rather have a better targeted system," he said.

"That is why I have always said that farm loan waivers are problematic and various bankers have also opined that it kills the credit culture. It's very difficult to lend to those people once again. So they also suffer in credit down the line even though they may get some short-run benefit. So those are my objections," he added.

He further said targeted transfers to the very poor have become a staple of capitalism and that is a part of the safety net.

"...what we see in this country is a number of political parties are saying we have become wealthy enough to be able to do it. But it still means it has to be done carefully and effectively, not layering one on top of another," Rajan said.

When asked whether he would like to return to India in public service or even a political role, he said, "I am very happy where I am. But if there is an opportunity to be of use I will always be there."

Rajan is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago's Booth School of Business in the US.

On whether the Rashtriya Swayamsevak Sangh (RSS) is a threat to India's composite culture, Rajan said: "I do not have any doubt there are good people in RSS...It is not an indictment of every person there."

"But the aim of majoritarian organisations is what I am more worried about. My worry is a very diverse country like India which has so many minorities, religion, ethnic groups, we simply cannot afford to say he belongs and she doesn't".

Rajan further said: "We have built a country based on tolerance and respect. And at this time we would be crazy to sacrifice that for a narrow sectarianism that will stand in our way of growth. If you are a true nationalist today you have to say that we have to be a country that respects all."