Debt waiver: CM passes buck to Centre

NAGPUR: The agrarian crisis in Maharashtra, linking the killing cotton fields in Vidarbha to the sugar belt of Western Maharashtra-Marathwada reeling under a glut, has put the Congress-NCP government in a dilemma. Should they waive agriculture debt worth Rs 7,500 crore or do nothing and face a disaster greater in magnitude than the suicide crisis?

As Opposition BJP-Shiv Sena gear up to raise storm over this demand on Tuesday, several legislators from the ruling Congress-NCP combine could join ranks with the Opposition members, sources told ET. A host of ruling party legislators, mostly from Vidarbha, are in a mood to support a move on Tuesday to demand a debt waiver.

A senior BJP leader said the Opposition would press for an adjournment of the Question Hour on Tuesday to discuss debt waiver. Ironically, NCP head honcho and Union agriculture minister Sharad Pawar’s recent stance virtually favouring debt waiver has come in handy for the Opposition.

Chief minister Vilasrao Deshmukh deftly chose to play by the rulebook saying the state government was not authorised to take a decision on this issue and it would respond favourably to any stand taken by the Union government.
But the Opposition is unlikely to allow the chief minister to take refuge in the niceties of protocol and propriety.

“We want the state government to declare a debt waiver in the House. The state government cannot excuse itself by citing point of propriety and saying that the Centre was authorised to take a call.

The moral and political onus is on the state government because it was the state leaders like RR Patil who assured loan waiver in the Assembly elections,” BJP legislative party leader Eknath Khadse told ET. Mr Khadse, who held the finance portfolio during the saffron alliance’s rule, dismissed the chief minister’s argument that debt waiver would wreck the health of banks and the formal crop credit system.

“This consideration should have been taken into account before the promise was made. Rs 7,500 crore on account of debt waiver is not much of a burden if it addresses the root cause of agrarian distress in the state. The government can raise loan to bear the burden,” Mr Khadse said.

The Opposition has already made it clear that it won’t be satisfied with a debt waiver only for the six districts of Vidarbha reporting a large number of farm suicides and which have already been covered by an interest waiver.
A powerful kapus dindi (cotton march) organised by the Shiv Sena in the hinterland of Vidarbha-Marathwada reached Nagpur on Monday where party executive president Uddhav Thackeray said a debt waiver was the only solution to the farm crisis in the state.

A loan waiver for six districts would cost the government around Rs 1,100 crore. If extended to the entire state, Mr Deshmukh said the burden would be Rs 7,500 crore. A senior bureaucrat pegged the cost at a mind-boggling Rs 1 lakh crore if the Union government chose to grant an agriculture debt waiver for the entire country.

“This is the reason why the Union government is the competent authority to take a decision. The six districts of Vidarbha are not unique in reporting farm suicides. There are five other states for which the Centre has rolled out a special rehabilitation package. If the demand to write off crop loans comes from these states, it’s the Union government that has to take a decision. We expect an early decision by the Centre,” Mr Deshmukh said.