CM Vasundhara announces loan waiver of up to Rs 50,000 for farmers

JAIPUR: With an eye on the assembly elections due later this year, Rajashtan Chief Minister Vasundhara Raje on Monday announced farm loan waiver of up to Rs 50,000 for small and marginal farmers in the last budget of her current tenure.
She said that outstanding and interest rate overdues for loans taken from co-operative banks will be waived off which will benefit about 20 lakh farmers in the state and the burden on the state exchequer will be around Rs 8,000 crore.
However, the budget makes a provision of only Rs 2000 crore to meet the obligations of the agriculture loan waiver scheme. Provision of another Rs 544 crore has been earmarked for providing short-term crop loan and interest rate subvention.
Reacting to the announcement, state Congress chief Sachin Pilot said that the loan waiver will not benefit a large segment of the farmers the government is aiming to reach. He said many farmers who have taken loans from local lenders will not be eligible for the benefits.
But a top official in the finance department said that majority of the farmers in the small and marginal category take short-term crop loans from the cooperative banks and the percentage could be around 60%. Again, while the loans would be waived off for farmers, the government will pay the cooperatives banks in a staggered manner.
“That’s why the provisioning of Rs 2000 crore does not mean, the government will not require additional funds. The cooperative banks will be repaid in a staggered way,” added the official.
Sources said Rajasthan has adopted the Kerala model in introducing the scheme and there is a proposal in the budget to set up a farmers’ loan relief commission which will take up various grievances of the farmers. The commission will engage the nationalised banks to find out ways where the state and the lenders can create possible solutions to provide relief to the indebted farmers.
As per the Budget estimates, the state government will get revenues of Rs 151,663 crore with fiscal deficit pegged at 2.98%. While the Budget has calculated its own tax revenue growth of 12% at Rs 58,099 crore during 2018-19, it expects share in central taxes to be around 43,000 crore. Also the Central grants are estimated at Rs 29857 crore.