In a budget that state finance minister Sudhir Mungantiwar called “farmer-oriented”, the demand to completely waive farm loans was turned down.
Instead, the state government pressed on the need for sustainable development of agriculture, and has earmarked more than Rs25,000 crore for agricultural, while and related activities such as irrigation have been given Rs11,045 crore.
The demand for a loan waiver has had the Opposition joining hands with the ruling Shiv Sena to stall house proceedings for the past eight days. But the government was firm. It said such a step would lead to a fiscal collapse and not benefit farmers.
Mungantiwar said of the 1.36 crore farmers, 1.07 are indebted, 67 lakh of them hold less than 1 hectare of farmland. To strengthen their financial condition, developing agricultural infrastructure is key, not a waiver. For this, the budget earmarked Rs 8,233 crore for pending irrigation projects; Rs2,812 crore for completion of 26 shortlisted projects nearing completion under PM Krishi Sinchai Yojana. To give a boost to the long-pending Krishna Marathwada project, the state made a separate Rs250 crore allocation, keeping it outside the governor formula. The project will irrigate 33,945 hectares in drought-prone Osmanabad and Beed and provide drinking water to 288 villages. NCP leader and former finance minister Jayant Patil, like many others in Opposition, criticised the state’s decision. “The state talks of allocation over and above the what was done as per guidelines of the Governor, but figures show it couldn’t even release funds allocated for irrigation projects.”
Mungantiwar said the government’s focus is on doubling agriculture income over the next four years by increasing production and productivity. The budget’s allocations show the state’s focussing on irrigation, electricity, food processing, technology, and to push for direct marketing of produce. The budget allocated Rs 979.10 crore for electrification of agicultural pumps in east Vidarbha. Tax on buying sugar cane imposed on sugar factories was waived to enable them to pay fair prices to farmers. This will cause a burden on the state exchequer for 2015-16 and 2016-17 of Rs700 crore. To encourage use of milk testing to curb adulteration, the state removed VAT of 13.5% on these kits.
On farm loans, CM Devendra Fadnavis said the Centre was positive about institutionalising the credit system and the state will bear its share. “The three-tier system will let farmers take fresh loans even if they are defaulters as the institutions providing loans are governed by RBI.”
Experts are not confident about the provisions. “I don’t think any of these schemes will directly benefit farmers. Take the farm pond scheme. The staten provides Rs 50,000 to farmers but it costs more than Rs1 lakh. Sugarcane tax waiver will benefit the factories,” said SS Magar, former vice chancellor, Konkan agriculture university.