Maharashtra Opposition Unrelenting On Demand For Farm Loan Waiver
Prithviraj Chavan says its imperative that the state helps the 31 lakh stressed farmers.
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Amid mounting demand for farm loan waivers, the Maharashtra government allocated Rs 14,000 crore to agriculture, water and allied activities in the state’s budget for financial year 2017-18.
The Congress-led Opposition, however, refuses to relent, especially after the Prime Minister Narendra Modi promised to waive loans of small farmers while campaigning for the Uttar Pradesh elections.
Nearly 31 lakh farmers in Maharashtra are on the verge of defaulting on their loans, according to the state finance minister.
Chief Minister Devendra Fadnavis recently met Union Finance Minister Arun Jaitley seeking relief, but no concrete plan has been announced yet.
Former Maharashtra Chief Minister and senior Congress leader Prithviraj Chavan is not convinced by the government's argument that the state's debt pile of Rs 3.7 lakh crore leaves little room for a Rs 30,500 crore farm loan waiver, without the Centre’s assistance.
Speaking to BloombergQuint, Chavan said the state should do exactly what the Congress-led United Progressive Alliance government at the Centre had done in 2008.
But Arundhati Bhattacharya, chairman of State Bank of India Ltd., India’s largest lender, recently said such waivers can disrupt credit discipline. Devendra Pant, chief economist at India Ratings, agreed. The waivers “only alleviate stress for the short term”, he said.
Acknowledging Bhattacharya’s concerns, Chavan said, “We are not asking her to give the money. It is the money that belongs to people of India, which they have given to the government in form of taxes.”