'Kamal Nath's loan waiver comes with several riders'
Waiver for loans availed from nationalised & co-operative banks till Mar 31; BJP terms move ‘fraud on farmers’ for introducing time limit.
An order issued by the Madhya Pradesh government said outstanding short-term crop loans of up to Rs 2 lakh as on March 31, 2018, taken from nationalised and co-operative banks by farmers would stand waived off. It said the same would apply to “eligible farmers”, whose eligibility will be determined through an exercise.
BJP termed this to be a “fraud on farmers” with the outgoing agriculture minister of BJP in Madhya Pradesh, Gourishankar Bisen asking why the new government was not waiving outstanding loans taken till September 30, 2018, and said the major chunk of pending crop loans would fall out of the ambit of the present announcement.
“Rahul Gandhi during the election campaign never mentioned a March 31, 2018, time cut-off for the farm loan waiver. He said pending loans as on date would be waived off within 10 days. Most farmers will now miss out,” Bisen, now an MLA, told ET, saying he will raise this in the state assembly. Rough estimates show that Rs 57,000 crore worth of crop loans are outstanding as on September 30, 2018, in Madhya Pradesh, including Rs 34,000 crore worth of loans taken from nationalised banks in the state and Rs 8,800 crore taken from co-operative banks. This involves nearly 41 lakh farmers.
Further, there are nearly Rs 15,000 crore worth of crop loans that have been declared bad loans (NPAs) involving another 21 lakh farmers, taking the total pending crop loans to the tune Rs 71,000 crore in Madhya Pradesh. Complicating such a huge payout of such loans to banks by the MP government is that the state is under a debt of Rs 1.75 lakh crore and its fiscal deficit would widen beyond manageable levels in case of the waiver.
MP would either need to take fresh loans from institutions such as NABARD, float bonds that it would hand over to banks or make provisions in its upcoming budget to fund the loan waiver on its own.
BJP, however, said only a fraction of loans would get waived off now as the new government has fixed a cut-off date of March 31, 2018.
“Short term crop loans are taken by farmers in two cycles in a year -- including one from July 1 to September 30.
A majority of farmers would have paid off their loans as on March 31, 2018, as per the cut-off date fixed by the new government and renewed their loans as we had waived off all interest under an ongoing scheme of the state government --and hence only a fraction of farmers will benefit rather than the expected lot of 60 lakh farmers. ” Bisen told ET.