The Maharashtra government on Saturday expanded its farm loan write-off in the state to 89 lakh farmers, raising the cap on loans of individual farmers that will be waived to Rs 1.5 lakh irrespective of the land holding size, a move that will cost the government Rs 34,000 crore. The government said it plans to shore up the money from banks, which will be repaid over the next four years.
Announcing the decision that was ratified by the state Cabinet, Chief Minister Devendra Fadnavis conceded it presented a fiscal challenge before the government. “We will tie up with banks to mobilise the funds, which would be repaid in the next four years in installments along with interest,” he said.
“Simultaneously, the government will continue to make higher capital investments in the agriculture sector along with the loan write-off to achieve its end objective of making farmers self-reliant,” Fadnavis said.
The loan write-off, named as Chhatrapati Shivaji Maharaj Krishi Sanman Yojna, will wipe out the debt of about 40 lakh farmers completely, sources said.
At Saturday’s meeting, the Cabinet also approved the guidelines and mechanism for implementing the loan write-off, which will apply to all farmers with debt till June 30, 2016. Additionally, farmers who have been repaying loans regularly will be provided a special incentive package not exceeding Rs 25,000. Out of the 1.36 crore farmers in Maharashtra, there are 80 lakh who are regularly repaying loans.
Under the modified norms for the loan write-off, parameters have been introduced to weed out non-farming categories to ensure that genuine farmers reap maximum benefits. These parameters will ensure that big business houses, professionals or politicians who own large parcels of agriculture land do not avail loan waiver benefits in the name of farmers.
“Maharashtra at Rs 34,000 crore has given the biggest loan waiver in the country. Andhra Pradesh has given Rs 20,000 crore, Telengana Rs 10,000 crore, Punjab Rs 10,000 crore and Karnataka Rs 8,000 crore,” Fadnavis said.