CM Devendra Fadnavis says disbursements to start the day before Diwali, with 80 per cent of the farm loan waiver process to be completed by 15 Nov.
Putting the entire state administration to test, Devendra Fadnavis’s Maharashtra government has set an ambitious target of completing 80 per cent of the implementation of the promised farm loan waiver by 15 November.
Thereafter, the state government will tackle the cases that have run into appeals and litigation, and plans to swiftly close those too within a span of a month to wind down the farm loan waiver scheme by the end of the year. The first disbursements will start on 18 October, and will go out to about 10 lakh farmers whose applications have been verified.
“We are starting the implementation tomorrow and will complete the disbursement within 25 to 30 days, by 15 November,” chief minister Fadnavis said.
“This will be 80 per cent of the job. After that, there will be a few cases where farmers will appeal against the government’s decision, or there might be litigation. We will settle such appeals within a month.”
If it succeeds, the government will have completed the process at an unbelievable speed, given past experiences of farm loan waivers.
One of the major criticisms of the 2008 waiver under the UPA government was the time taken in the execution of the scheme. A study by Credit Suisse in June said that the execution of such waivers could take several months due to complexity. “The 2008 waiver took 2.5 years from announcement to completion, and was 27 per cent smaller than announced,” the report had said.
The methodology
To speed up the implementation process and try to keep it watertight, the Maharashtra government set up 25,000 online registration centres across the state for farmers to register themselves for the loan waiver. Farmers were asked to submit copies of their Aadhaar cards and other bank and property documents there.
The government procured data from banks for nearly 60 parameters, such as the names of the account holders, type of loan, type of crop, and so on. Finally the information technology department of the state government juxtaposed the two sets of data — one from the banks and one from the registration centres — to identify genuine beneficiaries. Registrations closed on 15 September.
“More than one crore gave their biometric information at the registration centres, while about 60 lakh applied for the loan waiver,” the CM told a group of reporters Tuesday. “Farmers were allowed to give up to three accounts with every application, so the total number of accounts that we will have to settle are at 77 to 80 lakh. As of now, about 10 lakh applications are verified by our internal software and are clear. We will begin the disbursement to them tomorrow.”
Not a permanent solution
Under immense pressure from political parties, the Maharashtra government in June rolled out a scheme to waive individual farmers’ loans of up to Rs 1.5 lakh, irrespective of the size of their landholdings. Besides Maharashtra, the state governments of Uttar Pradesh and Punjab have also announced farm loan waivers, while demands for a similar scheme have also been made in states such as Madhya Pradesh, Karnataka, Haryana, Odisha, Rajasthan, Gujarat, and Uttarakhand.
Fadnavis, however, still maintains that the loan waiver is not a solution to the distress in agriculture, and may not stop incidents of farmers’ suicides.
“We can stop farmers’ suicides only be increasing investment in agriculture. A loan waiver will only improve the credit-worthiness of the farmer,” he said. “However, I will not let the expenditure on the debt waiver impact the planned investments in agriculture in the state.”
The Maharashtra government had initially estimated the total number of beneficiaries of the loan waiver scheme to be 89 lakh as per primary information from banks, and pegged the total loan waiver package at Rs 34,022 crore. The actual number of beneficiaries and the amount is, however, likely to be much lower, though the state government is at this point unwilling to put a number on it.