Give fresh loans to defaulting farmers, state tells banks

The Maharashtra government is unable to waive off loan of over 11 lakh farmers under its loan waiver scheme and has asked the banks to provide fresh loans to the farmers who are eligible under the scheme. It has also assured banks that the due loan amount would be paid along with interest in the coming months as it is facing financial crisis due to Covid-19 lockdown.

In an order issued on Friday, the state cooperation department has asked all the district central cooperative banks, commercial and other banks to approve fresh farm loans to farmers eligible under the scheme, even if the previous loan amount has not been cleared.

“The state government will pay the due loan amount along with interest which can be charged by the banks from April 1, 2020 till the amount is not paid,” states the government resolution (GR) issued by the cooperation department.

“We are not in a position to pay pending loan amount to the banks under the scheme as the revenue of the state was stopped completely since the lockdown was imposed from March 23. We need some time and thus have offered this scheme to the banks,” said a cooperation department official.

The financial crisis has led the state to declare a 67% cut in its spending for developmental works this financial year in view of the estimated revenue losses of over ~40,000 crore in March and April. The government had declared about 32 lakh beneficiaries under the scheme. It had transferred ~12,000 crore in the accounts of over 19 lakh farmers.