New Delhi: The Bharatiya Janta Party’s (BJP’s) poll promise in Karnataka to waive off farm loans is likely to intensify demands for a similar waiver in other states such as Madhya Pradesh, Chhattisgarh and Rajasthan which go to polls this year.

In February last year, Prime Minister Narendra Modi had promised to waive off farm loans in the very first cabinet meeting if voted to power in Uttar Pradesh, similar to the promise made on 4 May in BJP’s election manifesto for the Karnataka elections. BJP won the Uttar Pradesh polls with a thumping majority. However, the promise the party had made to waive off farm loans intensified protests by farmers across India for similar waivers.

Following protests by farmers across the state, the Maharashtra government was forced to announce a Rs34,022 crore loan waiver scheme in June 2017. This was followed by Punjab and a partial waiver of cooperative loans by the Karnataka government the same month.

“The promise of a crop loan waiver is the easiest path taken by political parties to win elections, but past experience shows that delivery often falls short of promises made," said Ashok Gulati, agriculture chair professor at the Delhi-based Indian Council for Research on International Economic Relations.

The recent experience has not been rosy. Compared to what the Maharashtra government announced, till the end of March 2018, farmers received just Rs14,500 crore in their loan accounts. Uttar Pradesh, which announced a Rs36,359 crore package in April last year, has disbursed about Rs21,000 crore so far.

The Punjab government’s loan waiver scheme, which promised to waive loans of up to Rs200,000 did not specify a financial outlay but officials had told Mint in June last year that it could cost anywhere between Rs8,000 crore and Rs10,000 crore. Nearly a year later, the state had disbursed less than Rs300 crore into farmers’ accounts, said Jagmohan Singh, a farmer leader from Patiala.

The fine prints of the waivers announced by states are also different. While Maharashtra allowed all farmers irrespective of their land holdings to be a part of the waiver scheme, Punjab and Uttar Pradesh limited it to small and marginal farmers owning up to two hectares of land. The states also set a cut-off date ruling that loans taken prior to that date will not qualify for a waiver, such as 31 March 2016 for Uttar Pradesh.

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