Seeds of farm loan waiver take root again in political discourse

Nearly two months after the Yogi Adityanath government in Uttar Pradesh announced ~36,000 crore worth of farm loan waiver in the state, several other state governments are under pressure from farmers’ groups to promise farm debt relief as a palliative for agrarian distress. With assembly polls due in many of the states in west and central India by 2018-end, political parties are looking at farm debt waivers as an electoral instrument.

Maharashtra, Madhya Pradesh and some other states have witnessed sustained farmer agitations over the past one week. In both Madhya Pradesh and Maharashtra, farmers have resorted to novel ways to protest, including pouring litres of milk and throwing vegetables on roads. The effort has been to bring the issue of agrarian distress at the centre of public consciousness and make state governments take remedial measures.

On Saturday, Maharashtra Chief Minister Devendra Fadnavis promised waiver of loans of small and marginal farmers with land holdings of five acres. He announced a waiver that would benefit 3.4 million farmers, especially those outside the ‘institutional credit system’, and is estimated to the cost the state exchequer ~30,000 crore.

Fadnavis said the loan waiver will come into force by October 31, 2017. “Of the state’s 13.6 million farmers, 3.1 million have not been able to access crop loans since 2012. Restructuring of loans for this segment was not permissible. Therefore, the only way forward was to write off loans,” media reports quoted him as having said. Maharashtra currently has a public debt of nearly ~4 lakh crore.

In April, Fadnavis had ruled out farm debt waiver. He told the legislative assembly that his government had taken several steps to help farmers. He had said the state government’s finances were stretched and a loan waiver was not possible without Centre’s financial assistance. But unabated farmer protests, shortage of vegetables and subsequent increase in prices have led the chief minister to announce a waiver on Saturday. Farmers’ groups, however, decided to continue with their agitation.

If Fadnavis is under pressure from the Opposition in Maharashtra, neighbouring Karnataka’s Chief Minister K Siddaramaiah has been put in a spot on the issue by