Maharashtra Govt announces Rs 34,000 cr farm loan waiver

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SME Times News Bureau | 26 Jun, 2017
The Maharashtra government on Saturday announced a loan waiver package of Rs 34,000 crore that will provide relief to 89 lakh farmers in the state.

After a cabinet meeting cleared the loan waiver package, Maharashtra Chief Minister Devendra Fadnavis told media persons here that debts of up to Rs 1.5 lakh per farmer will be written off, which means loans of at least 40 lakh farmers will be completely waived.

Those who paid back their loan amount regularly will be given Rs 25,000 bonus or 25 percent loan return benefit -- whichever is lower, he added.

Earlier this month, the BJP-led state government had agreed to waive farmers' loans after widespread protests by farmers in various parts of the state due to a fall in prices of agricultural produce.

Fadnavis called the loan waiver decision a "historic step" and named the package after Maratha warrior king Chhatrapati Shivaji.

"Farmers could not repay loans due to losses they incurred following low rains and hailstorm. So we have taken this historic decision to help farmers. No other state has given such a large waiver," he said.

He admitted that the state would have to face a huge financial burden due to the exercise.

"It is true that the government will have to bear additional burden. We will cut expenses to other departments. We will have to take some hard decisions," he said.

The decision was taken after a meeting between the BJP and its ally Shiv Sena chief Uddhav Thackeray, Nationalist Congress Party chief Sharad Pawar and other leaders in the opposition.

He added that all ministers and MLAs will give a month's salary to support the loan waiver.

The government will also implement a One Time Settlement (OTS) scheme for farmers with a debt of over Rs 1.5 lakh.

Of the farmers in debt, six lakh can avail the scheme for a one-time settlement of up to Rs 1.50 lakh.

Farmers outfits had demanded complete loan waiver without any cap.

Incidentally, the state government has excluded from the loan waiver the government employees, other than Class-4 staff, sitting and former legislators, income tax payers and traders with an annual turnover of more than Rs 10 lakh, who all own land and have raised crop loans.