With a price tag of Rs 60k Cr here’s why a blanket farm loan waiver would be the first litmus test for CM Uddhav Thackeray?

Nagpur:

Trying hard to look to be settled in his new Avatar as the Chief Minister of Maharashtra, Uddhav Thackeray looks more uneasy, unsure of how should he keep his biggest pre-poll commitment to the voters, a blanket loan waiver to farmers. Already the state is burdened with a Rs 4,70,000 crore debt burden, and according to governments own estimates the complete farm loan waiver is going to put huge additional burden of Rs 60,000 crore on the state exchequer. The collateral fallout of this complete farm loan waiver is most likely to be some big ticket infrastructure projects.

A senior official claimed as and when the state government announces a blanket loan waiver, Uddhav will not be able to make financial provisions for any development projects. “The decision will be disastrous for the economy of the state. The state will need more than Rs 50,000 to Rs 60,000 crore for blanket loan waiver and it is highly impossible for the state or raise this much of funds from its own exchequer.”

He said that Centre has never provided financial aid of more than Rs 4,000 crore and there is no provision to allocate aid for the loss of crop due to excessive rains (wet drought). It was (PM Narendra Modi) Modi Ji who had supported his government.

Political observers believe that the farm loan waiver would not only test the CM’s resolve but also his political maneuvering skills to satisfy the voters as well as the alliance partners, Congress and Nationalist Congress Party (NCP).

Sources in the government said Thackeray is likely to announce the loan waiver in the ongoing winter session of the state legislature. Even if he decides to waive the complete crop loan, the state government will need at least Rs 60,000 crore and that will place a huge burden on the already over burdened state’s economy. 

According to a senior bureaucrat, Maharashtra is the most developed and financially stable with a debt burden of Rs 4.70 lakh crore which is under control as per laid down norms. This debt burden has a direct impact on state exchequer whereas the debt of around Rs 2 lakh crore taken by various state-run Corporations does not impact directly even though the government is a guarantor for the loan. 

Uddhav Thackeray is trying make sense of how much will his promise of a complete farm loan waiver is going to further burden state exchequer from the Finance Secretary. The Finance secretary has given three cap limits to enable farmers avail benefit of the scheme. It includes those farmers, who have maximum loan up to Rs 3 lakh, Rs 5 lakh and a maximum ceiling of Rs 7 lakhs.

According to the government official, if the state is to include even farmers who have loan amount of up to Rs 3 lakhs in the scheme, the state will need to make an outlay of Rs 60,000 crore. 

“The earlier government led by Devendra Fadnavis had put a cap of Rs 1.5 lakh to avail the benefit of Chhatrapati Shivaji Maharaj Shetakari Sanman Yojana or the loan waiver scheme. The erstwhile BJP-Shiv Sena coalition government had transferred around Rs 18,000 crore to the bank account of beneficiary farmers. Thackeray government is planning to dispense the loan waiver amount in the accounts of concerns banks,” claimed the official.

Former chief minister and present Leader of Opposition (LoP) Devendra Fadnavis said, “If Thackeray government makes a mistake of transferring the loan waiver amounts in banks accounts of farmers, his purpose (to make 7/12 land extract of farmers nil and make them re-eligible for all crop loans) will go wrong and no farmer will be benefited.”

He further said, “Farmers have stopped paying their loan installments to the banks after Uddhav declared to implement a blanket loan waiver if they came in power. The banks have made provision of dues against Non-Performing Assets (NPA) accounts. There is a probability that the banks will show these accounts to the state government and get the same amount in the name of loan waiver.”

“Being Opposition party leader, I will demand aggressively that Thackeray government should help farmers by giving them compensation of Rs 25,000 per hectare,” said Fadnavis. It will result in extra burden of Rs 25,000 crore on the state exchequer. 

An official from the agriculture department said farmers who have small land holding and crop loans under Rs 3 lakh will be covered. In fact, this amount is also huge and most of the small farmers take loans up to maximum limit of Rs 1 lakh. Such type of farmers with small land holdings are to be seen in Marathwada, Vidarbha and North Maharashtra. Whereas, in Western Maharashtra, even if the farmers have less land holding, he is used to taking huge loan amounts and to take multiple yields as they have better facility of canals to irrigate there fields.