Opposition eyes rural gain with shrill pitch for farm loan waiver

Government won’t relent on demand, aims for comprehensive loan policy.

Written by Shubhangi Khapre | Mumbai | Published: July 14, 2015 2:59:00 am
 Congress, NCP, loan loan waiver, indian farmer, farmer loan, rural maharashtra, mumbai news, city news, local news, maharashtra news, Indian Express Opposition raises slogans as Chief Minister Devendra Fadnavis (left) enters Vidhan Bhawan. (Source: Express Photo by Ganesh Shirsekar)

The Opposition in Maharashtra led by Congress and NCP appears to have closed ranks and are now pushing strongly for a complete loan waiver of Rs 16,000 crore to provide relief to farmers across the state, sensing that it will help boost its political image especially in rural Maharashtra.

Out of 288 MLAs, 135 MLAs represent rural constituencies across party lines. Although opposition parties are aware that such a demand is unlikely to be fulfilled, they believe that a loan waiver would help them to consolidate support across party lines. The Congress and NCP along with smaller parties make up for just 95 MLAs.

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By raking the farmers crisis, they are betting on elected members representing the ruling Shiv Sena and BJP also echoing their sentiments. Both the leader of the Opposition, Radhakrishna Vikhe-Patil, and former finance minister, Jayant Patil, acknowledge it will be a complex fiscal challenge to waive off Rs 16,000 crore by a government which is still reeling under a massive debt burden of Rs 3,5 lakh crore.

Yet, the shrill demand of the Congress-NCP leaders for a loan waiver is keeping in mind a broader political strategy rather than just plain economics.

Chief minister, Devendra Fadnavis has ruled out a complete loan waiver in the monsoon session. According to Fadnavis, if a one time loan waiver of Rs 16,000 crore would help farmers, his government would take a decision. “But I know for certain that such measures taken in the past have not provided any relief to farmers. On the contrary we are adopting a more comprehensive policy that would help farmers to avail of loans for zero interest in the first year and low interest in the subsequent five years. Our approach is to make the farmers self reliant economically.”

Besides, some more relief measures are being worked out by the government to sustain the agri-crisis both short- and long-term. A senior official in the state finance department said that any decision taken to write-off loans would have a cascading effect which would place an extra burden on the state treasury. “Taking loans to address the issue is also not advisable,” the official said.

Speaking to The Indian Express, Vikhe-Patil said, “As a political party, we are bound to mirror the unrest among farmers reeling under severe drought in 25,000 villages. It is for the government to work out their budgets.” He added that the rescheduling of loans to provide cushion to the farmers with zero interest rate in first year and subsequent low interest over extended five years is a good step. “But that alone will not help and more needs to be done,” he said.

According to Patil, huge financial implications cannot come in the way of finding a solution to tackle the crisis. “I admit complete loan waiver is not an easy task,” he said.

Several MLAs from the ruling alliance from rural Maharashtra said that if they don’t voice the demand for a loan waiver it would be politically incorrect. They also conceded that while a complete loan waiver is not the lasting solution, on the floor of the assembly, the party would have to sing a different tune.

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