Mumbai: Over the past seven years, Maharashtra has seen three governments and three versions of one farm loan waiver scheme, with every government wanting to leave its stamp on the programme.
The change in the anatomy of the farm loan waiver scheme with each successive government has left officials scrambling to wrap up the project, especially the bulkiest original version rolled out under the Devendra Fadnavis-led government in 2017.
The farm waiver scheme remains incomplete even as Maharashtra heads for an assembly election and a new government is likely to take over the state’s reins soon.
New governments, especially if they belong to a different party, are known to dismantle their predecessor’s schemes and replace them with their own. However, farm loan waivers are a politically sensitive topic and successive governments often don’t scrap a programme but try to put their stamp on a previous scheme to brand it as their own.
Maharashtra officials have been trying to ensure 100 percent completion of the farm loan waiver schemes but have faced many challenges along the way ranging from technical issues to the coronavirus pandemic.
At the same time, opposition parties are demanding a complete farm loan waiver in Maharashtra where 2,851 cases of death by suicide by farmers or farmhands were reported in 2023.
Challenges & delays
Analysts say loan waivers are a temporary solution that drains the exchequer and the farm sector needs long-term solutions. Until then, farmers in Maharashtra are pinning their hopes on the quick completion of the loan waiver schemes.
While work on two of the three versions of the loan waiver scheme is more than 90 percent complete, implementation of the original continues to drag on.
Its status remains unclear as the state government is struggling to get real-time data due to technical issues.
A source from the state cooperation department told ThePrint the implementation of the first loan waiver scheme has been stagnant for the past two to three years because of technical challenges.
While the bulk of the work for the other two is complete, challenges such as ascertaining the next of kin for payouts following the death of some beneficiaries have caused some delays. “Despite these challenges, we are trying our best to complete the scheme,” the official told ThePrint.
ThePrint reached the additional chief secretary in the state cooperation department, Anoop Kumar, for comment but had not received a response by the time of publication. This report will be updated if and when a response is received.
Three avatars of a farm loan waiver
Maharashtra introduced the first Chhatrapati Shivaji Maharaj loan waiver scheme for farmers in 2017 when Fadnavis was chief minister of the BJP-Shiv Sena government.
Following pressure from political parties, the Maharashtra government rolled out the scheme in June of that year to write off individual farmers’ loans of up to Rs 1.5 lakh, irrespective of the size of their landholdings. Fadnavis had initially set an ambitious target of completing 80 percent of the process by 15 November 2017.
However, officials told ThePrint the first scheme is stalled because the IT department is still in the process of porting names to the system. “The data has to be transported from the MahaOnline portal to the MahaIT portal. It is technical and there are glitches in the portal,” a state cooperation department official said.
Government data was initially stored on the online portal MahaOnline, but it was replaced in 2017-18 by the Maharashtra Information Technology Corp Ltd (MahaIT) portal for more efficient use of technology. Glitches developed about two to three years ago and state cooperation department officials say they have been asking for the data but haven’t had any luck yet. They were told the matter would be resolved but there was no time frame.
“We wrote to MahaIT department sometime back, but still haven’t received any information,” the official added. “Meanwhile, we decided to complete the second part of the scheme.”
When the Maha Vikas Aghadi (MVA) government under Uddhav Thackeray came to power in 2019, one of its first decisions was to introduce the Mahatma Jyotirao Phule loan waiver scheme to put its own imprint on the programme.
This scheme was modelled on the previous one but the payout and cut-off dates were different. Under this scheme, the loan write-off amount was increased and farmers who took loans of up to Rs 2 lakh between 2015 and 2019 were eligible for a loan waiver.
Implementation of this scheme was much smoother as it didn’t involve any transfer of data from one portal to another.
Government data shows more than 95 percent of the Maharashtra government’s 2019 Mahatma Jyotirao Phule scheme is complete. According to the data, 33.33 lakh farmers were eligible and of this number, 32 lakh farmers have already received a waiver.
In 2022, the government changed again when Eknath Shinde rebelled against the Uddhav Thackeray-led Shiv Sena with a majority of MLAs in tow and caused a vertical split in the party. Shinde’s Shiv Sena formed a government with the BJP with Shinde as chief minister.
Within a month of coming to power, the Shinde government added another layer to the farm loan waiver—an incentive of Rs 50,000 to farmers who had been paying their dues on time. It found that 14.40 lakh accounts were eligible and set aside Rs 5,222 crore for this purpose. It has nearly wrapped up 14.38 lakh farm accounts, or 99 percent of the total.
“We are almost in the process of wrapping up the Mahatma Jyotirao Phule scheme. This scheme is not recurring. It has a cut-off date of 2019. So the data will not increase,” said the official quoted above. “But those who are remaining are mostly those who are deceased. We are in the process of finalising how to pay their kin.”
Vicious cycle of loans
At the start of a crop cycle, farmers approach banks for short-term loans to buy seeds, fertilisers, pesticides and other farm products. However, adverse conditions like drought, floods and hailstorms hit their crop, leading to non-payment of the loans.
In the past, the Centre has also tried to bail them out by writing off their loans. Back in 2008-09, the then UPA government at the Centre had extended a farm loan waiver, but it faced criticism for its slow implementation.
Fadnavis had promised to implement the Chattrapati Shivaji Maharaj Yojana at breakneck speed. However, 2019 state government data shows that while about 50 lakh bank accounts were accepted for a waiver under this scheme, 44 lakh received benefits worth over Rs 18,600 crore before the scheme was stopped temporarily about three years ago because of technical problems. Nearly 6.5 lakh farmers are still to get the benefit and “we do not yet know when this will happen,” the government official quoted above said.
Under this scheme, farmers whose loans were pending from April 2001 to the end of June 2016 were eligible to apply for the waiver. Irrespective of the landholding size, the scheme waived off outstanding crop loans up to Rs 1.5 lakh per family.
This scheme also included farmers who made regular repayments in 2015 and 2016. These farmers got Rs 25,000 as an incentive for “good credit behaviour”.
Those with an outstanding amount of more than Rs 1.5 lakh were expected first to deposit the extra amount to be eligible for the waiver.
Under the Mahatma Jyotirao Phule Farmer Loan Waiver Scheme introduced when the MVA came to power, crop loans of up to Rs 2 lakh pending from April 2015 to June 2019 were written off. Farmers whose crop loan and restructured loan was more than Rs 2 lakh were not eligible for any benefit under the scheme.
When the Shinde-Fadnavis government came to power, they extended the incentive under the scheme and farmers who had paid their dues regularly in at least two of the three financial years—2017-18, 2018-19 and 2019-20—were offered an incentive of Rs 50,000.
Political analyst Hemant Desai told ThePrint loan waivers are not the final solution and long-term solutions are needed as the agrarian crisis is deepening.
“A complete loan waiver is a burden on the state exchequer. So instead, a guarantee on the MSP (Minimum Support Price), tackling the issue of bogus seeds, holding periodic district-level credit plan meetings and, most importantly, timely and efficient crop insurance disbursal need to be in place. Also, the climate forecast needs to be correct,” he said.
(Edited by Sugita Katyal)
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