₹34,022­cr Maha farm waiver

BAILOUT Highest ever write­off by any state government will help 89 lakh farmers in distress

It is true that the state government is not in a position to bear the additional burden but our endeavour is to keep the fiscal deficit in check. DEVENDRA FADNAVIC, Maharashtra chief minister

MUMBAI: The Maharashtra government on Saturday announced it would spend ₹34,022 crore to write off farm loans, a decision that would help 89 lakh farmers in debt across the state.



The loan waiver, which chief minister Devendra Fadnavis said was the “highest by any state in India’s history”, will cover 65% of all farmers in Maharashtra. Of this, loans of 40 lakh farmers will be completely written off.

The government announced the waiver a month ahead of the July 25 deadline set by farmers’ outfits. The loan waiver decision was made at an unscheduled cabinet meeting called by Fadnavis on Saturday.

The write-off came with conditions — a cap of ₹1.5 lakh per farmer, and only farmers who took loans before June 30, 2016, are eligible. The government said despite these conditions, 40 lakh farmers will not have to make any payments at all while 6 lakh can avail of a scheme that lets them make a one-time settlement of up to ₹1.5 lakh. The government also announced an incentive for those farmers who paid back loans regularly, giving them a bonus of ₹25,000 or 25% of loan repaid — whichever was higher.

Fadnavis said, “This was a historic decision as no other state has given such a large waiver. Andhra Pradesh waived loans up to ₹20,000 crore, Punjab has allotted ₹10,000 crore, Telangana announced a ₹15,000 crore while Karnataka announced an ₹8,000crore waiver.”

Farmers’ outfits in the state were not happy with the package as they have been against the ₹1.5 lakh cap and June 2016 deadline. “We have been demanding a complete loan waiver without any conditions. The government has backtracked on the promise it made to us,” said Raghunath Patil of the Shetkari Sanghatana.


Justifying the cap on the maximum amount, Fadnavis said the outstanding loans per farmer in states such as Kerala, Punjab and Andhra Pradesh were ₹2.13 lakh, ₹1.19 lakh and ₹1.23 lakh, it was ₹54,700 in Maharashtra.

The specifics of the waiver were decided after hectic rounds of discussions with ruling ally Shiv Sena’s chief Uddhav Thackeray, key opposition leaders, including Nationalist Congress Party chief Sharad Pawar, state Congress chief Ashok Chavan, and Swabhimani Paksha chief Raju Shetti over two days.

Fadnavis said the government had succeeded in arriving at a consensus. “I think the farmers will be satisfied with the package. They will not stand by disgruntled leaders, even if a call to agitate comes after this,” he said.


Although Thackeray insisted the upper cap be raised to ₹2 lakh, the ruling party settled it at ₹1.5 lakh. The government earlier wanted to cap the waiver at ₹1 lakh per farmer but after severe opposition by farmers’ outfits and opposition parties, a ministerial group under revenue minister Chandrakant Patil worked out a proposal.

The waiver has been named after the Maratha king — Chhatrapati Shivaji Maharaj Krishi Sanman Yojana. The state said the package won’t apply to government and semi-government employees (except Class-4 employees), sitting and former legislators, elected representatives to civic and district bodies, income-tax payers, and farmers and traders with an annual turnover of more than ₹10 lakh.


The waiver will add to the state’s financial burden, and this could affect development projects, Fadnavis admitted, but said the government will tie up with banks for a staggered repayment of loans.

“We are talking to nationalised banks on how to schedule the repayment of loans that we take . It is true the government is not in a position to bear the additional burden but our endeavour is to keep fiscal deficit in check,” he said.

State Congress chief Ashok Chavan said the decision was taken only after the Congress pursued the demand of a waiver.

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