Rajasthan government announces waiver of farm loans up to Rs 2 lakh
Two days after newly elected Congress governments announced farm loan waivers in Madhya Pradesh and Chhattisgarh, Rajasthan chief minister Ashok Gehlot announced a similar relief on Wednesday, clearing short-term loans of up to Rs 2 lakh from cooperative and nationalised banks.
The move will lead to a burden of Rs 18,000 crore on the state exchequer, Gehlot said. Congress chief Rahul Gandhi promised farm loan waivers within 10 days of coming to power ahead of the recent assembly elections in which his party defeated the Bharatiya Janata Party (BJP) to clinch power in the three heartland states.
“Entire short-term crop loan from cooperative banks will be waived. Along with this, farm loan of up to Rs 2 lakh from nationalised and other banks will also be waived,” Gehlot told reporters after a meeting. About four million farmers will benefit from the move, according to the government’s estimates.
While announcing the move, the Rajasthan CM took a dig at the previous Vasundhara Raje-led government, which had announced farm loan waivers from cooperative banks of up to Rs 50,000 in the budget for 2018-19.
“The last (BJP) government breached the promise of farm loan waiver and provided just Rs 2,000 of the total Rs 8,000 crore needed to provide relief to the farmers. As the burden of remaining Rs 6,000 crore was falling on us, we decided that instead of Rs 50,000, we will waive off farm loans of up to Rs 2 lakh,” Gehlot said.
BJP spokesperson Mukesh Pareek said the Congress government should inform the people about the source of the money needed to waive the farm loans in the state. “It is a welcome move, but it should not remain a mere announcement,” he said.
SS Somra of Rajasthan University’s economics department said this type of a loan waiver is not productive for the economy and can have a negative impact in the long run. “These are political decisions but in the long term not in the country’s interest. Those sincerely paying the loan amount may get disappointed,” he said.