Farm loan waiver: Yogi Adityanath moves in to pre-empt stir over delay

Even as the Uttar Pradesh government has already announced farm loan waiver to the tune of Rs 36,000 crore, the Yogi Adityanath government is moving swiftly to translate the scheme on the ground and pre-empt any stir by state farmers over delay in extending the benefit.

Taking leaf from UP, another Bharatiya Janata Party (BJP) ruled state, Maharashtra has announced agricultural loan waiver, while demands are cropping up in other BJP bastions too, notably Madhya Pradesh, which has recently witnessed violent protests and subsequent police firing.

Chairing a meeting regarding farm loan waiver, Yogi directed the finance department to soon convene a state-level meeting of all banks to ensure successful roll out of the scheme. The banks have been directed against issuing notices to beneficiary farmers until the state budget is passed. The farm loan waiver proposal would be put before the UP assembly in the budget session for legislative approval.

Yogi also directed for constituting a district level committee under the respective district magistrate for seamless execution of the scheme. He has also appealed to the farmers to cooperate with the authorities and ensure their KYC formalities were completed for prompt relief disbursal at their doorsteps.

On April 4, the Yogi cabinet had approved a scheme to waive off farm loan waiver of small and marginal farmers subject to a ceiling of Rs 1,00,000, thus fulfilling one of the BJP’s top pre-poll promises in UP. The scheme covered farm loans sourced from banks during 2015-16 financial year towards procurement of seeds, fertiliser and pesticides.

However, the opposition has attacked the Yogi dispensation for allegedly reneging on its promise of complete agricultural loan waiver in UP and tweaking it to cover only farm loan waiver of small and marginal farmers, and that too for 2015-16 fiscal.

The farm loan waiver would cost the state exchequer Rs 30,729 crore. An additional Rs 5,630 crore would be incurred towards writing off non-performing assets (NPA) accumulated by commercial and cooperative banks in agricultural sector. Thus the total succour to farmers amounts to Rs 36,359 crore.

There are an estimated 23 million farmers in UP, of which 92.5 percent or roughly 21.5 million belong to the small and marginal segments. The farm loan waiver is projected to benefit roughly 8.6 million farmers. Besides, writing off the agricultural sector NPAs is projected to benefit 7,00,000 farmers.

The Yogi government would float farmers’ Relief Bond to the tune of the composite farm loan waiver amount to arrange funds for the scheme.

At the end of March 2016, total agricultural loan outstanding in UP stood at about Rs 1,21,000 crore, which increased to Rs 1,30,000 crore at the end of March 2017. Thus, farm loan waiver of Rs 30,729 crore was roughly 25 percent of total outstanding agricultural loan of Rs 1,21,000 crore incurred during 2015-16.