MP tribals not to repay loans to moneylenders under new law

NEW DELHI: Madhya Pradesh government on Monday decided to waive all loans taken by Scheduled Tribes from unlicensed moneylenders. The state would also not pay them.

The cabinet’s decision would be effective in 89 tribal-dominated blocks. After the announcement, tribals who have taken loans from unofficial sources, including traditional money lenders, would not have to repay them. “These loans would be treated as zero,” P C Sharma, a senior minister in Madhya Pradesh, said after the cabinet meeting.

The government has waived off the loans through an amendment to Anusuchit Jan Jaati Sahukar Viniyam 1972. The cabinet approved addition of a new section, which enabled this loan waiver. A similar amendment had last been done in the regulations in 1982.


Last week, Madhya Pradesh chief minister Kamal Nath had announced the loan waiver in his tribal-dominated home constituency of Chhindwara. On August 9, which is marked as the International Day of the World's Indigenous People, Nath had said his government is in the process of waiving off loans of ST families taken from unofficial lines of credit, including private, unlicensed moneylenders.

The amendment specifies that a criminal case would be registered against a private moneylender who intimidates a tribal to repay the loan. The punishment includes simple imprisonment of up to three years and a fine of Rs 1 lakh.

Through the amendments in regulations, the state cabinet on Monday also decided that even the licensed moneylenders would no longer decide the rate of interest, which will now be fixed by the government.

The cabinet also decided that children studying in private madarsas would also get mid-day meals.