Yogi to launch flagship Rs 36,000 cr crop loan waiver scheme tomorrow

Scheme will cost exchequer Rs 30,729 crore; 8.6 million farmers to benefit

Uttar Pradesh Chief Minister Yogi Adityanath will roll out ruling Bharatiya Janata Party’s (BJP) flagship crop loan waiver scheme on Thursday by handing over loan waiver certificates to a group of farmers in Lucknow.

On April 4, the Yogi cabinet had approved this flagship scheme officially referred as ‘Rin Mochan Yojana’ (Loan Alleviation Scheme) to waive off crop loan of small and marginal farmers subject to a ceiling of Rs 1,00,000. It covers crop loans sourced from banks during financial year 2015-16 towards procurement of seeds, fertiliser and pesticides.

The scheme would cost the exchequer about 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 the agricultural sector. Thus, the total succour to the state farmers amounts to Rs 36,359 crore.

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

While it was earlier announced to float Farmers’ Welfare Bond to finance its flagship crop loan waiver scheme, the government had later said it had successfully managed its finances by judiciously utilising resources, cutting expenses and plugging leakages in the budget without having to resort to external funding.

“The crop loan waiver is technically not loan waiver, but debt redemption. We would redeem the debt of small and marginal farmers,” UP additional chief secretary (finance) Anup Chandra Pandey told reporters after the Budget was table in the state Assembly.
 

Earlier, the Yogi government had directed banks against issuing notices to beneficiary farmers until the state budget cleared the loan waiver proposal.

The state had constituted district level committees under the respective district magistrate for seamless execution of the scheme. In the first phase, farmers whose bank accounts have been linked with Aadhar number would be provided with the certificates followed by the remaining farmers.

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, crop loan waiver of Rs 30,729 crore was roughly 25 per cent of total outstanding agricultural loan of Rs 1,21,000 crore incurred during 2015-16.

BJP-ruled Maharashtra and Congress-ruled Punjab also announced agricultural loan waivers. Similar demands have also been raised in other states like Madhya Pradesh. Meanwhile, the Centre asked states to fund these schemes out of their own resources.

Earlier, the Yogi government had directed banks against issuing notices to beneficiary farmers until the state budget cleared the loan waiver proposal.

The state had constituted district level committees under the respective district magistrate for seamless execution of the scheme. In the first phase, farmers whose bank accounts have been linked with Aadhar number would be provided with the certificates followed by the remaining farmers.