Devendra Fadnavis refuses to waive loans, promises to invest in agriculture

Devendra Fadnavis announced that his government will invest Rs25,000 crore in agriculture over the next five years


A file photo of Maharashtra chief minister Devendra Fadnavis. Photo: S. Kumar/Mint
A file photo of Maharashtra chief minister Devendra Fadnavis. Photo: S. Kumar/Mint

Mumbai: “It’s the people’s will. I am their leader. I must follow them,” said Jim Hacker, minister for department of administrative affairs in Yes Minister, highlighting the politician’s dilemma: To lead the people, or to be led by them?

Maharashtra chief minister Devendra Fadnavis, however, was having no such dilemma last week. Fadnavis needs to be congratulated for not succumbing to pressure from friends and foes alike to waive farm loans worth about Rs.24,000 crore. He rejected the demand and announced that his government will instead invest Rs.25,000 crore in agriculture over the next five years to improve water availability, provide electricity infrastructure in rural areas and encourage food processing facilities, which will add value to farmers’ produce and generate rural employment. To raise the resources, the government said it will raise taxes.

With parts of Maharashtra facing drought-like conditions for the third year in a row, there were loud demands for another waiver. Fadnavis, however, stood against the demands from opposition parties like Congress, Nationalist Congress Party (NCP) and even ally Shiv Sena.

The loan waiver, which could not have solved the problem of farmers’ suicides, would have ensured there was no money in the state coffers to invest in the agriculture sector, which is essential to make it sustainable.

Maharashtra received only 55% of average rainfall between 1 June and 15 July. Conditions have improved since then, but not in Marathwada which was worst hit by the droughts in 2013 and 2014. According to the state government’s revenue department, 1,300 farmers took their lives in the state between January and June this year.

The opposition parties and the Shiv Sena disrupted proceedings in both houses of the state legislature on the first three days of monsoon session which began on 13 July. However, a compromise was reached and the treasury agreed to discuss the motion tabled by opposition parties demanding a loan waiver.

During the discussion, opposition parties targeted Fadnavis’s urban upbringing and painted him as someone who doesn’t understand the pain of the farmer. He represents Nagpur south-west, an urban constituency.

However, Fadnavis refused to yield, and explained how a similar waiver in 2008 failed to stop suicides. In fact, 10,000 Maharashtra farmers committed suicides between 2008 and 2014.

In 2008, ahead of Lok Sabha elections, the United Progressive Alliance (UPA) government had announced a Rs.76,000 crore loan waiver. Of this, farmers in Maharashtra got Rs.7,500 crore.

The biggest beneficiaries were the relatively prosperous farmers in western Maharashtra, while the poorer ones from Vidarbha and Marathwada got just Rs1,275 crore.

Banks typically provide higher crop loans to farmers whose lands are irrigated. For example, a farmer growing cotton on irrigated land could get a loan of Rs.50,000 per acre, while someone growing cotton on non-irrigated land would get only Rs.20,000. Hence, during the last loan waiver, wealthier western Maharashtra farmers with irrigated lands benefitted the most, while farmers who depend on rainfall got much less.

Fadnavis pointed out that a loan waiver does not help unless the farmer is provided with assured irrigation, electricity connection and facilities to process agro produce.

Since he has boldly rejected a combined demand for loan waiver, it is now Fadnavis’s moral responsibility to ensure that Rs.5,000 crore is invested every year in agriculture during his term, and that this happens with minimum leakages.

Janta maaf nahi karegi (People will not forgive),” the Bharatiya Janata Party’s general election slogan went last year, bringing attention to the broken hopes of voters and their capacity to hold their rulers to account. Fadnavis must keep his word, or the 2014 slogan will come to haunt him in 2019.

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