Today Chief Minister of Maharashtra, Devendra Fadnavis, announced a loan waiver for farmers – a demand over that the state has witnessed continuous protests over the last ten days. A loan waiver was the highest priority of the list of demands by farmers, the other being a lack of a fair price for their crops. Farmers in Maharashtra called off their planned protest as the Maharashtra govt. today announced its decision to waive their loans. Revenue Minister Mr. Chandrakant Patil said, “The government has decided to waive farmers’ loans. The loans of farmers with small land holdings stand waived from Sunday 11th June 2017”.
Farmer leader Raju Shetti said, “the farmers have decided to temporarily call off their agitation. However, if no satisfactory decision is taken by 3rd week of July 2017, we will restart our stir”
With the opposition National Congress party consistently accusing the Bharatiya Janata Party (BJP) of ignoring the farmers’ demands, the state government’s move is seen as an attempt to staunch the political fallout of the protests.
Drawing a warning from the Reserve Bank, last week Mr. Devendra Fadnavis had announced a loan waiver plan. While he did not spell out the size of the waiver or who will be eligible for that, saying these will be worked out, he said he will ensure it was the largest in Maharashtra till date. Mr. Fadanvis said, “I am challenging the NCP, Congres and other parties that this will be the biggest loan waiver in the history of the state”.
Maharashtra’s public debt is set to 4 lakh crore rupees by the next March 2018 and will up spending 31,000 crores just to pay interest on its debt. Following the announcement of the state government, RBI Governor Mr. Urjit Patel had pointed out what he called the risks of going down the “slippery path”. He said it can dissipate the fiscal gains made by states since last 5 years and asked the Maharashtra governments to “tread very carefully”.
Not only Maharashtra, several other state governments also had announced large and small loan waivers for farmers. In April, BJP’s Yogi Adityanath government in Uttar Pradesh (UP) announced more than 35,000 crores farm loan waiver that it had promised in the run-up to the elections.
Last year, Tamil Nadu’s late chief minister J Jayalalithaa also had waived the farm loans of 16.94 lakh small and marginal farmers. This year in April, the Madras High Court ordered that the farmers who own more than 5 acres be also brought under its ambit. The Telangana govt. headed by K Chandrasekhara Rao also processed the fourth installment of a farm loan waiver which was part of its election promise.
In Maharashtra, Shivraj Singh Chouhan is providing what it calls “interest-free loans at the rate of minus ten percent” – meaning in a loan of Rs. 1 lakh, farmers need to pay back only 90 thousand rupees.
