Govt may review old schemes to save funds to waive farmers loans

The Congress government in Madhya Pradesh may review several schemes initiated by the previous Shivraj Singh Chouhan government to fund the party’s promise to waive farm loans up to ₹2 lakh per head, government officials familiar with the matter said. The agriculture department estimates the loan waiver to cost ₹35,000 crore. 

The first scheme to face the axe was the Deendayal Vananchal Yojna that provided health and education facilities to forest dwellers. On December 24, the Kamal Nath government issued an order scrapping the scheme on procedural grounds --- the absence of approval from the finance department. The state government spent about ₹5.50 crore in the last financial year on the scheme introduced in 2016, according to forest department officials.

“We are compiling all the schemes introduced by the previous government and the money spent on these schemes. The status report will be presented before the state cabinet to take a call,” said a senior officer familiar with the matter who asked not to be named.

The previous government introduced several schemes such as the Sambal Yojna, Mukhyamantri Teerth Darshan Yojna, Mukhyamantri Kanyadan Yojna, Ladli Laxmi Yojna, and Krishak Samridhi Yojna targeted at senior citizens, women, farmers, poor households and students.

Under the Sambal scheme, the government provides electricity at a flat rate of ₹200 a month to labourers from the unorganised sector and farmers having land of up to five acre; it reimburses the power distribution companies if the monthly bill is over ₹200. As a result, the government has to spend about ₹150 crore per month. At least 20 million people have registered to avail of the scheme introduced in July.

“There is concern of excessive consumption of power by beneficiaries. The new government will have to look into the same”, said an official in the energy department who asked not to be named.

Jayant Malaiya, finance minister in the Bharatiya Janata Party government, said: “The schemes of the previous government may be affected as the new government may not have adequate funds after waiving the loans of farmers. If the loans are really waived, the government may not have money for other schemes and infrastructure of the state may also suffer.”

Government officials said the problem the new state government is confronting is that it may not be able to scrap or modify many of Chouhan’s schemes for fear of alienating people before the 2019 Lok Sabha polls.

Principal secretary, finance, Anurag Jain declined to comment on how the government will meet its requirement of funds to waive the farmers’ loans.

Economist Jayantilal Bhandari said, “The government may scrap some of the previous government’s schemes. At the same, it may look into the areas like tourism, industries, skill development etc to generate more funds. But given the huge amount of debt and lack of balance in income and expenditure, it’s a huge task in the government’s hands at present to fulfil its promise.”

State Congress spokesperson Bhupendra Gupta said, “There is no problem in arranging money for the loan waiver, though the previous government left the treasury empty. The previous government spent most of funds on rallies, events and advertisements. With fiscal discipline and revenue realisation, the government can manage the funds.”