Centre refuses to aid financial support for the Rs 30,000 crore farm loan waiver

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The Maharashtra government suffered a huge setback on Tuesday when central government refused to aid financial support for the Rs 30,000 crore farm loan waiver, which was announced by chief minister Devendra Fadnavis last week.

Union urban development minister M Venkaiah Naidu, who was in Mumbai on Tuesday categorically ruled out the centre’s help for the loan waiver. “States such as Uttar Pradesh, Telangana and Andhra Pradesh have announced loan waivers on their own and Maharashtra will have to do the same,” Naidu told mediapersons, reported Hindustan Times.

The decision taken by Fadnavis declared loan waiver for small and marginal farmers by October 31 to quell farmers’ agitation, which had begun on June 1. The CM said the decision is likely to benefit 31 lakh farmers, who were unable to access crop loans for the past four to five years owing to bad loans. The state is likely to spend about Rs 30,000 crore or more to write off these loans to help farmers.

The move of the central government comes on the back of weak finances of the state. Maharashtra has one of the highest debt in the country and is estimated to touch Rs 4.13 lakh crore by the next fiscal.

State finance minister Sudhir Mungantiwar said, “After July 1, once the GST comes in to effect, the state government will have no power to impose any taxes or cess. The only thing we can do is save money wherever possible.”

He, however, added that the state’s financial status was improving with each passing year. “The state tax revenue has risen by 14%. The government is also expecting a rise in its non-tax revenue. We are ready to implement the decision,” Mungantiwar said.

The state government headed by Fadnavis is hopeful that they can help the farmers with their loans and are studying the model implemented by Andhra Pradesh government for the loan waiver. “The system ensures only one member from each family avails the waiver, in case there are multiple accounts. It means only the deserving ones will get the benefit,” he said.