Yogi Adityanath govt decides to waive farm loans in Uttar Pradesh
- Market Live: Sensex rises over 100 points, Nifty above 10,350, Future Group stocks gain
- Tesla blows through $8,000 every minute amid Model 3 woes
- Rupee opens higher against US dollar
- Moody’s upgrade boosts already growing confidence in Indian debt
- Uber concealed hack that exposed 57 million people’s data
New Delhi: The Uttar Pradesh government of chief minister Yogi Adityanath decided to waive farm loans totalling Rs36,359 crore on Tuesday, potentially putting pressure on other state governments to follow suit.
The decision, taken at its first cabinet meeting on Tuesday, is in line with a key campaign promise made by the ruling Bharatiya Janata Party (BJP), which came to power in the state by winning a landslide in the February-March assembly election. The decision is expected to benefit at least 21.5 million small and marginal farmers in the state.
Other state governments could now come under pressure for a similar waiver.
In Maharashtra, ruled by a BJP-Shiv Sena coalition, Sena chief Uddhav Thackeray was quick to congratulate Adityanath for implementing the poll promise. He asked Maharashtra chief minister Devendra Fadnavis to also waive farm loans.
“If farmers’ loans can be waived in India’s largest state of UP, why can’t a similar measure be announced in Maharashtra where agriculture dominates the economy and where the farmers are committing suicides in large numbers,” Thackeray asked.
The UP government said loans up to Rs1 lakh taken by small and marginal farmers will be waived. The waiver, applicable for 2016-17, includes Rs30,729 crore of crop loans, and Rs5,630 crore loans taken by 700,000 farmers which have turned into non-performing assets (NPAs).
“Prime Minister Narendra Modi and BJP president Amit Shah had made a commitment in the assembly elections, and the state government has fulfilled its commitment,” health minister Siddharth Nath Singh told reporters after the cabinet meeting in Lucknow.
“There are a total of 2.30 crore farmers in Uttar Pradesh, out of which at least 92.5% farmers, 2.15 crore, are small and marginal farmers who will benefit the most from the decision. The decision is significant because farmers have suffered due to drought and floods. This decision of the state government will give them relief,” he said.
Singh added that the Uttar Pradesh government will introduce Kisan Rahat (farmers’ relief) Bonds to raise money for the loan waiver. The proposal will be introduced in the upcoming state budget, Singh said.
The BJP won a historic 312 out of the 403 seats in the assembly in the recent assembly election. The National Democratic Alliance (NDA) it leads won a total of 325 seats.
“Farmers need to be supported and a loan waiver is required at this point of time, but the government needs to look at a long-term solution for the problem of low farming incomes. The basic question is -- why are farmers getting into a debt trap so soon and unless the government looks at that, there will be no substantial relief,” said Himanshu, associate professor at Jawaharlal Nehru University, Delhi, and a columnist with Mint.
“Frequent loan waivers create a problem of moral hazard...Similar demands are likely to come from states like Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh where farmers are affected,” he added.
Congress chief spokesperson Randeep Surjewala said in a statement: “UP government’s first cabinet meeting has shattered the hopes of the farmers. Yogi-led cabinet has decide to waive off loans of just Rs36,000 crore which will neither free the farmers of their loans nor will it give them enough relief.”
Abhiram Ghadyalpatil in Mumbai contributed to this story.