Maharashtra woes, from farm to fork

The Rs 30,000 crore loan waiver announced by Devendra Fadnavis will only add to the state’s indebtedness and add to the chief minister’s worry lines

Written by Shaji Vikraman | Published:June 9, 2017 4:06 pm
Maharashtra farmers protests, Devendra Fadnavis, Madhya Pradesh farmers protest, Mandsaur, What should worry Fadnavis is that the Rs 30,000 crore farm loan waiver will add to the state’s deep indebtedness. (File photo)

As a young legislator in 2013, Devendra Fadnavis went for the erstwhile Prithviraj Chavan-led NCP Government’s jugular on the issue of farmer suicides, the irrigation scam and the government’s position on the farm sector.

Three years later, it is the farm sector which is threatening to weigh him down. Fadnavis’ critics are accusing him of being urban-centric and having a limited connect with farmers, even though he hasn’t been as singed as fellow BJP chief minister, Shivraj Chouhan of Madhya Pradesh.

But as the farmers agitation spread, Fadnavis was forced to compromise on another plank — writing off loans. The Maharashtra chief minister has always believed that loan write-off is not a durable solution, but in this case, politics came in the way. Apparently, Delhi prodded him into announcing a Rs 30,000 crore waiver.

Fadnavis may have kicked the can down the road. That’s because the detailed scheme for the write-off will be finalised only by the end of October. It could be that the government is hoping that a good monsoon will allay a large amount of troubles on the farm. Significantly, Fadnavis completes three years in October; the farm loan write off at that time could be used to counter opponents who believe the Chief Minister and his party lack the sensitivity in handling issues relating to the farm sector.

What’s been noticeable about this issue is that Fadnavis has had to handle it personally – many political heavyweights have been benched and many newcomers are too inexperienced. Maharashtra has a well diversified farm sector — sugarcane is dominant in western Maharashtra, cotton, soyabean and pulses (such as tur dal) are grown in the dryland farming belt of Vidarbha, while horticultural produce such as oranges, pomegranates and mangoes are grown in the Konkan belt.

Incredibly, a record production of pulses – over 20 lakh tonnes – has eaten into farmer incomes. With India being a traditional importer of pulses, last year’s Minimum Support Price was pegged at over Rs 5000 per tonne, which means that famers who grew pulses made good money. But in March, the government put out an advance estimate of 11.7 lakh tonnes, which it had to later embarrassingly revise to 20.35 lakh tonnes.

Compounding the state’s woes is the continuing ban on export as well as a bilateral agreement signed with Mozambique last year to import tur dal for five years. Additionally, the squeeze post-demonetisation didn’t help.

What should worry Fadnavis is that the Rs 30,000 crore farm loan waiver will add to the state’s deep indebtedness. Over the last two years, the state has added Rs 100,000 crore to the debt bill — its total debt is set to top Rs 4 lakh crore next fiscal. Annual interest payments alone will account for Rs.30,000 crore.

The elbow room for extra borrowings is fast narrowing at a time when several big ticket projects are underway. Fadnavis is betting big on the Nagpur- Mumbai expressway and the expansion of the Mumbai metro. For a state which is the top contributor to the country’s GDP, the fiscal indicators look a little more worrying now.

The latest farmland agitation is a sign that any thoughts of a mid-term poll, fuelled by the party’s strong showing in the zilla parishad polls a few months ago, may have to be jettisoned for now.

Shaji Vikraman is the bureau chief of the Indian Express edition in Mumbai

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