High court asks Tamil Nadu to waive loans of all farmers
Centre to pitch in; decision to cost state additional ~1,980 crore
The Madras High Court on Tuesday directed the Tamil Nadu government to waive loans of all farmers, against the state’s earlier decision to offer the waiver to only marginal and small holders.
The court also restricted co-operative societies and officials from carrying out recovery proceedings against the defaulting farmers. The decision, which would put an additional burden of ~1,980 crore on the state exchequer, is expected to help an additional 301,000 farmers.
The state’s farmers have been protesting at Jantar Mantar in Delhi, seeking a loan waiver and the Centre’s assistance to deal with “one of the worst droughts” to have hit Tamil Nadu in about 100 years.
On June 28, 2016, the state government ordered the waiver of outstanding crop loans, medium-term agriculture loans and long-term farm sector loans issued to small and marginal farmers by cooperative societies as on March 31, 2016. It defined small farmers as those with holdings of 2.5 to 5 acres, and a marginal farmer as those with holdings up to 2.5 acres.
The loan waiver scheme was expected to benefit 1.7 million farmers and cost the government ~5,780 crore.
The court on Tuesday observed that the financial situation of the state was grim and the government had single-handedly shouldered a burden of ~5,780 crore.
The Bench criticised the categorisation of the farmers as discriminatory and asked the government to provide the same support to all farmers, regardless of their land holdings. It observed the additional burden on the government would be around ~1,980 crore.
“We further direct the department to issue necessary consequential order extending the impugned scheme to all farmers. The order shall be issued within three months from today,” the Bench said.
The Centre cannot be a silent spectator in such a difficult situation and should help the state government, said the court.
“The central government is aware of the severe drought in Tamil Nadu. Farmers have started taking extreme steps and are committing suicide. Saving the farming community is not entirely on the shoulders of the state government but on the central government also,” it said.
It is for the state government to approach the central government for allocation of funds for this purpose. The court expressed hope that the Centre would consider this unprecedented situation and extend a helping hand.