Mumbai: Maharashtra chief minister Devendra Fadnavis on Monday rejected a united demand by the opposition parties and ally Shiv Sena to waive agriculture loans for 2014-15. He said the government, instead, will invest 5,000 crore every year over the next four years in agriculture to provide irrigation, power connections and food processing facilities. The government, he said, will raise taxes to mobilize funds for this purpose.

Fadnavis was replying to discussion on a motion tabled by the opposition parties demanding a loan waiver. Maharashtra is facing a drought-like situation for the third year in a row, with the state receiving only 55% of average rains between 1 June and 15 July.

No work could be taken up in the first three days of the ongoing monsoon session of the state assembly began on 13 July, as opposition Congress and Nationalist Congress Party (NCP) pressed their demand.

Even Sena, which is part of the ruling coalition, supported the demand for a loan waiver. The work could begin only after government accepted to have a discussion on opposition’s motion demanding loan waiver for farmers.

Asserting that loan waivers have failed to arrest farmer suicides, Fadnavis said, “In 2008, then United Progressive Alliance (UPA) government announced a loan waiver and loans amounting to 7,500 crore of the farmers from the state were waived off. However, out of this 7,500 crore, farmers from the state’s most backward regions Vidarbha and Marathwada received benefit to the tune of just 1,275 crore, and the rest went to farmers in western Maharashtra which is relatively prosperous."

Despite the loan waivers during 2008-14, nearly 10,000 farmers committed suicides in the state, Fadnavis said, adding loan waivers are not the solution.

“Nearly 60% farmers in Vidarbha and Marathwada are out of formal credit system; so, our first task should be to bring the maximum number of them within the formal credit system. My government has taken steps to bring more farmers within formal credit system and this can be seen by the higher disbursal of loans to farmers from these regions by the banks. Before the beginning of kharif season in 2015, both nationalized and cooperative banks disbursed additional loans of 1710 crore to farmers from these regions."

“If we are serious on finding a solution on the issue of farmer suicides, we must invest in agriculture and my government will invest 5,000 crore in agriculture every year over the next four years. This will be an additional amount other than the routine schemes which are run by the government. And to raise resources for investment in agriculture, if needed, my government will raise taxes also," Fadnavis said.

However, Fadnavis did not elaborate which taxes he plans to increase to mobilize resources.