Rs 34,000cr loan waiver

Maharashtra to write off farm debt up to Rs 1.5 lakh

By PTI and Our Bureau in Mumbai
  • Published 25.06.17

Mumbai, June 24: The BJP-led Maharashtra government today unveiled a Rs 34,020-crore farm loan waiver scheme, under which debt of up to Rs 1.5 lakh each will be written off, making 40 lakh farmers debt-free and providing relief to 49 lakh others.

Chief minister Devendra Fadnavis said this was the "biggest" loan waiver scheme in the country. He said all BJP ministers and legislators would contribute a month's salary towards the loan waiver.

"This Rs 34,020-crore loan waiver scheme - 'Chhatrapati Shivaji Maharaj Krushi Sanman Yojana' - will benefit 89 lakh farmers in the state, out of which 40 lakh cultivators will become debt-free," he told reporters here.

Fadnavis, who had been under pressure to bring in an agrarian relief programme to help farmers hit by falling prices of produce and recurring drought, said the state cabinet approved the decision today.

"There has been a demand for loan waiver for farmers who have been severely affected due to continuous drought since 2012. They were not able to get new loans for their crops until previous debt was paid. We have time and again assured them that we will help the distressed farmers," he said.

"In the past two to three days, we have held discussions with various stake-holders, leaders of political parties, farmers groups, and finally decided to grant the biggest loan waiver given by any state in the country," the chief minister said.

The Uttar Pradesh government had announced a Rs 1-lakh loan waiver for all marginal and small farmers (those owning up to 5 acres of farmland). The scheme is expected to cover 2.15 crore of the state's 2.30 crore farmers in the state and cost Rs 30,729 crore.

Fadnavis said although the agriculture loans per household in Maharashtra were almost half of that in other states, the state government decided to announce the biggest loan waiver scheme.

"The land extracts of farmers having loan up to Rs 1.5 lakh will be cleared, thereby making around 40 lakh cultivators debt-free. Farmers, whose crop loan has been restructured from 2012 to 2016 and who are defaulters as on June 30, 2016, will get incentives up to 25 per cent of the crop loan or Rs 25,000, whichever is less," he said.

He added: "For 6 per cent farmers, the government will bring in an OTS (one-time settlement) scheme, under which those who have debt of Rs 1.5 lakh, will get 25 per cent of the outstanding amount or Rs 1.5 lakh, whichever is less."

Fadnavis added: "We are aware that a decision of this scale will have a bearing on the fiscal health of the state. To counter this, some tough decisions will have to be taken".

He said that all ministers, members of the state legislature, Class-I officers, government employees, traders who are eligible to pay value added tax (VAT) and those who are liable to file IT returns from sources other than agriculture have been exempted from the loan waiver decision.

"Unlike the last time when the loan waiver was announced (by the Congress-NCP government), we take due diligence to ensure that there is no corruption in this scheme by banks. Banks will be monitored so that they disburse the loan amount to the beneficiaries," the chief minister said.

According to the chief minister, the government would tie up with banks to fix a repayment schedule for farmers who take new loans. This will be on the lines of an initiative by Andhra Pradesh and Telangana.

Farmers in the state had launched an agitation on June 1 to press for several demands, including loan waiver. The protest had disrupted supply of vegetables and other essentials to cities, including Mumbai, for some days.

The farmers' demand for loan waiver was backed by all political parties. The agitation was called off on June 11 after the state government gave an assurance on drawing up a scheme to help the debt-stressed cultivators.