Maharashtra eases another farm loan waiver rider, farmers now eligible for Rs 2 lakh

The Mahatma Jyotirao Phule farm loan waiver scheme covered short-term and restructured loans, under which many farmers with loans exceeding Rs 2 lakh had received only partial relief. While a committee led by Pravin Pardeshi had recommended that farmers who had already availed benefits under that scheme should not receive another waiver under the newly announced Punyashlok Ahilyadevi Holkar scheme, the government had decided to extend them a benefit of up to Rs 50,000. However, following the insistence of all-party MLAs and a delegation of Mahayuti MLAs led by BJP MLA Randhir Savarkar, the state government decided to raise that benefit to Rs 2 lakh.

The latest relaxation comes after Opposition parties argued that several eligibility conditions attached to the scheme would leave out a large number of distressed farmers. On June 8, The Indian Express reported that the state government’s own Cabinet note said the eligibility restrictions were among the reasons the government’s eventual expenditure was expected to be lower than the projected outlay of Rs 36,585 crore.

Following the criticism, Agriculture Minister Dattatraya Bharne had said the government was willing to modify the scheme’s norms to ensure more farmers benefited. The state government subsequently constituted a Cabinet sub-committee headed by Fadnavis to review the scheme and suggest changes to its eligibility criteria. Friday’s announcement marks the first major relaxation of one of the scheme’s key conditions.

“Maharashtra is the only state to have implemented agricultural loan waivers three times consecutively. There was a fear that the banking system might collapse if loans were not repaid in hope of a waiver,” Fadnavis said while replying to the final week resolution brought by the Opposition.

The CM claimed that the Punyashlok Ahilyadevi Holkar loan waiver scheme is the largest among all the loan waiver schemes implemented so far. Fadnavis stated that while a loan waiver is not a permanent solution, the scheme was announced to ensure that farmers do not have to turn to moneylenders.

“We had given our word to the farmers before the assembly elections. We have now won all the elections, so it is not the case that these schemes were introduced just to win elections. This scheme includes loan waivers, a one-time settlement, and an incentive plan. The government provides Rs 25,000 crore annually for electricity bill waivers for farmers, which is paid to Mahavitaran. If one looks at the agricultural department’s planning budget, Rs 95,000 crore are given to farmers in the form of various schemes and subsidies.”

He further noted that the scheme was designed after holding meetings with all banks, and it is expected to benefit 56 lakh farmers, dismissing the Opposition’s allegation that the loan waiver would only amount to Rs 12 to 13 thousand crore as baseless.