State gears up for farmers’ loan waiver

Uttar Pradesh is gearing up for waiving of farmers’ loans at the first meeting of the state cabinet to be held in coming days. Chief minister Aditya Nath Yogi on Thursday presided over a high-level meeting and took feedback on the total outstanding loans of farmers.

Although details are still being worked out, sources said a loan of Rs 62,000 crore was due to be paid on December 31, 2016 by nearly 67 lakh small and marginal farmers in the state.

As an average of Rs 90,000 is due to be paid per account of such farmers, the state government is working out the total amount to be waived.

The state government may have to incur an expenditure of about Rs 62,000 crore if the total outstanding loan is waived.

It will have to bear a burden of Rs 33,000 crore if a decision to waive a loan up to a maximum of Rs 50,000 per farmer is taken.

The BJP’s 2017 assembly poll manifesto had made a mention of waiver of crop loan of small and marginal farmers.

Prime Minister Narendra Modi had declared during his election campaign that he would get the loans of farmers waived at the first cabinet meeting of the BJP-led government.

Senior officers are busy working out various plans for loan waiver.

As the state government already faces major challenges on the financial front in 2017-2018, it has been left with only limited options.

“The state government will either seek funds from the Centre or borrow funds from the market to implement the poll announcement,” said a senior officer.

The implementation of the seventh pay commission recommendations has already put an additional burden of Rs 18,000 crore per annum on the state exchequer.