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Maharashtra Unveils Rs 34000 Crore Loan Waiver, 89 Lakh Farmers To Benefit

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

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The BJP-led Maharashtra government on Saturday (24 June) 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.

Making the announcement, Chief Minister Devendra Fadnavis said this was the "biggest" loan waiver scheme in the country.

He also informed that 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 total 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 a major agrarian relief programme to help farmers hit by falling prices of produce and recurring drought, said the state cabinet approved the decision on Saturday (24 June).

"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 that we will help the distressed farmers," he said.

"In the last 2-3 days, we have held dialogues 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.

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

"The 7/12 land extracts of farmers having loans 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 still 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 debts of Rs 1.5 lakh, will get 25 per cent of the outstanding amount or Rs 1.5 lakh, whichever is less."

According to Fadnavis, although the decision would put a burden on the government, it takes some tough decisions to tide over. "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 further said that all ministers, members of the state Legislature, Class-I officers, government employees, traders who are eligible to pay Value Added Tax (VAT), those people who are liable to file I-T returns from sources other than agriculture, have been exempted from the loan waiver decision.

He said, "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."

According to the chief minister, the government would tie up with banks to fix a repayment schedule for farmers who take new loans, on the lines of that done 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 stir had disrupted supply of vegetables and other essentials to cities, including Mumbai for some days.

Their demand for loan waiver was backed by all political parties, including the alliance partners Shiv Sena.

The stir was called off on June 11 after the state government gave a firm assurance on brining in a comprehensive scheme to help the debt-pressed cultivators.

The government had also announced setting up of a high- level committee for the implementation of the scheme to decide on the criteria of debt relief.

The state government had also promised Rs 10,000 initial loan assistance at the start of Kharif season.