Maharashtra’s farm loan waiver falls short of target
A year after it had announced with much fanfare a ₹34,000 crore loan waiver for distressed farmers, the Maharashtra government has disbursed only half of the declared amount. According to latest data from the Cooperation and Information Technology Departments, the State has disbursed ₹16,498 crore as opposed to the initially estimated ₹34,000 crore. The loan waiver scheme has reached 39.08 lakh farmers as against an estimated 80 lakh announced by Chief Minister Devendra Fadnavis last year. “We have ended the scheme for now and only a few more crores may trickle into it. The estimated transfer is much lesser than our estimates based on the projections made by the bank,” said a senior official of the state government. State officials said the estimated amount could not be disbursed since most of the farmers did not have a loan and savings account, needed for claiming a loan waiver. As opposed to eligible 78 lakh farmers, the government only received 57 lakh applications. Of the total, ₹12,386 crore was disbursed as one time settlement (OTS), another ₹2,544 crore under the incentive-based scheme and ₹1,568 crore as the second instalment of the OTS. Mr. Fadnavis had admitted last year the farm loan waiver will burden the State’s finances for the next two years. Maharashtra had joined Uttar Pradesh, Karnataka and Punjab to announce the waiver recently. The State has over ₹4,00,000 crore in debts and a recent fiscal report by India Ratings warned that the waiver will push the State’s fiscal deficit to 2.71% of the Gross State Domestic Product (GSDP) in the current financial year. The report has also estimated a rise in debt/GSDP at 17.44% over a budgeted 16.26%.