10.06.2017: Mumbai: The Maharashtra sitting on the frying pan of risk has announced a loan waiver for farmers. A loan waiver was on the top of a list of demands by farmers, the other being a lack of fair price for their produce. Following the announcement, the farmers called off the protests scheduled for tomorrow.
Drawing a warning from the Reserve Bank, Mr Fadnavis had announced a loan waiver plan last week. While he did not spell out the size of the waiver or who would be eligible, saying these would be worked out, he said he would ensure it was the largest in the state till date. “I am challenging the Congress, NCP and other parties… that this will be the biggest loan waiver in Maharashtra’s history,” Mr Fadnavis, who is having trouble keeping the state’s expenses under check, had said.
Maharashtra’s public debt is set to cross 4 lakh crore by the next March and will up spending more than 31,000 crores just to pay interest on its debt.
Following the announcement, RBI Governor Urjit Patel had pointed out what he called the risks of going down the “slippery path”. He said it could dissipate the fiscal gains made by states over the last few years and asked the state governments to “tread very carefully”.
Besides Maharashtra, several other state governments had announced large and small loan waivers for farmers.
In April, the Yogi Adityanath government announced a 35,000 crores farm loan waiver in Uttar Pradesh that it had promised in the run-up to the elections.
Last year, late Tamil Nadu chief minister J Jayalalithaa had waived the loans of 16.94 lakh small and marginal farmers. In April this year, the Madras High Court ordered that farmers who own more than five acres be also brought under its ambit. Besides, the Telangana government headed by K Chandrasekhara Rao also processed the fourth installment of a farm loan waiver that was part of its election promise.
In Maharashtra, which has also been witnessing huge protests with the demand of loan waivers, the Shivraj Singh Chouhan government is providing what it calls “interest-free loans at the rate of minus 10 per cent” – meaning in a loan of Rs. 1 lakh, farmers need to pay back only Rs. 90,000