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Saturday, Oct 19, 2019

Madhya Pradesh and Chhattisgarh waive off farm loans

In the run-up to the state assembly elections, Congress president Rahul Gandhi promised farm loan waivers in Madhya Pradesh, Chhattisgarh and Rajasthan within 10 days of the Congress coming to power.

india Updated: Dec 17, 2018 23:56 IST
HT Correspondents
HT Correspondents
Hindustan Times, Bhopal/Jaipur/Raipur
Madhya Pradesh Chief Minister Kamal Nath addresses a press conference after assuming office, in Bhopal.
Madhya Pradesh Chief Minister Kamal Nath addresses a press conference after assuming office, in Bhopal.(PTI Photo)
         

In his first decision, taken within two hours of assuming office as chief minister of Madhya Pradesh on Monday, Kamal Nath waived the outstanding short term crop loans of farmers up to Rs 2 lakh as on March 31, 2018, taken from nationalised and the cooperative banks.

The decision will benefit as many as 3.4 million farmers and will cost the exchequer between Rs 35,000 to Rs 38,000 crore, according to the state’s agriculture department. The final figure will be known only after the department gets exact data on outstanding short-term loans.

An order waiving the loans was signed by principal secretary (agriculture) Rajesh Rajora after Nath cleared the proposal. Government officials said the government would soon start issuing farm loan waiver certificates to the farmers.

Chhattisgarh chief minister Bhupesh Bhagel, who too took charge on Monday, followed suit and announced his government will waive farm loans worth Rs 6,100 crore of around 1.66 million farmers.

He also announced that the government will increase the minimum support price for paddy from Rs 1,700 per quintal to Rs 2,500 a quintal.

In the run-up to the state assembly elections, Congress president Rahul Gandhi promised farm loan waivers in Madhya Pradesh, Chhattisgarh and Rajasthan within 10 days of the Congress coming to power.

As per the Madhya Pradesh-level bankers committee data, the amount of outstanding crop loans on farmers stood at Rs 75,823 crore as on March 31, 2018. There are 9.8 million cultivators in the state as per the 2011 Census.

The budget size of Madhya Pradesh for financial year 2018-19 was Rs 1,83,666 crore.

Shivkumar Sharma aka Kakka ji, president, Rashtriya Kisan Mazdoor Sangh, said the decision fulfils the demand of farmers partially. Farmers have been demanding a complete loan waiver, he added. The RSS-affiliated Bharatiya Kisan Sangh’s state general secretary Shivkant Dixit said, “The decision will benefit only about 1.6 to 1.7 million farmers and the amount to be waived is merely about Rs 5,600 crore.”

State BJP spokesperson Rajneesh Agrawal said: “The chief minister’s decision to waive only short term loans is nothing but betraying the farmers as the Congress did in Punjab and Karnataka too. The fact remains that about 76% farmers in the state repaid their short term loans on time to avoid it being converted into long term loans. Thus, the CM has talked of waiving loans of only a marginal section of farmers.”

In Rajasthan, where the Congress won 99 assembly seats, the outstanding farm loans add up to about Rs 49,500 crore and of this, the previous Bharatiya Janata Party (BJP) government headed by Vasundhara Raje has already waived short term farm loans of up to Rs 50,000 from cooperative banks, spending? Rs 8,000 crore in the process. The state government took short-term working capital from National Cooperative Development Corporation to waive the loans.

In Chhattisgarh, where the Congress swept polls by winning 68 of the 90 seats, the loan given to farmers in the current financial year was Rs 4,770 crore. Around 71% of the farmers in the state repaid their short term farm loans during the period from July 1, 2016, to May 31, 2017, state government officials said.

Apart from the farm loan waiver, Nath also sanctioned four garment parks. Nath said incentives would be given to new industries only if 70% of those employed are from the state, and added that his aim is to increase economic activity in the state.

First Published: Dec 17, 2018 23:45 IST

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