Devendra Fadnavis offers Rs 30,000-crore farm loan waiver; some shun it, others take it

MUMBAI: After 48 hours of agitation, leading to a rise in vegetable prices across Maharashtra, agitating farmers met state chief minister Devendra Fadnavis who promised a loan waiver to small and marginal farmers who were out of the ‘institutional credit system’ that would benefit 34 lakh farmers and would cost the state exchequer Rs 30,000 crore. While some farmers have rebuffed the offer, some accepted it.

ET spoke to bureaucrats who believe that the state is simply not in any position to give a complete loan waiver. “We have to calculate the effect this Rs 30,000 crore would have on the system. What the farmers are demanding is simply not possible as we would have to pay an additional Rs 1 lakh crore and above. Even Uttar Pradesh has not given a complete loan waiver,” the official explained.

Another official said that even for the Rs 30,000-crore loan, the state would need Centre’s assistance.

The official pointed out that in March this year Maharashtra finance minsiter Sudhir Mungantiwar had sent an SOS to finance minister Arun Jaitley, seeking a reduction in interest rates on loans given by the Centre.

Mungantiwar wanted the interest rate reduced to 6.5% from the current 9.5% on loans worth Rs 75,000 crore, and had expressed his helplessness, given the state’s woeful finances.

With no breakthrough in sight, state officials are hoping that monsoon arrives soon and the farmers get back to the sowing season instead of agitating. Sunday is the fourth day of the farmers’ strike.