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Rs 3 lakh crore debt poses challenge for agri loan waiver

The Congress government has announced to completely waive farm loans which would cost over Rs 1 lakh crore to the exchequer.

, ET Bureau|
Dec 18, 2018, 06.52 AM IST
Jaipur: Now that the dust has settled, the newly-formed Rajasthan government which, according to its chief minister is reeling under a debt of Rs 3 lakh crore, faces the mammoth task of waiving farm loans as promised during the election campaign.

Newly-elected chief minister Ashok Gehlot, who had earlier raised concerns over the pathetic financial condition of the state, has reiterated his party’s commitment that the waiver will be implemented within 10 days after the first cabinet meeting. “The day will be counted from the date of the first cabinet meeting,” he said.

Amra Ram, a farmers’ leader, said there is a debt burden of around Rs 1 lakh crore on farmers in Rajasthan.

“The Congress government has announced to completely waive farm loans which would cost over Rs 1 lakh crore to the exchequer. It looks unlikely.

In Madhya Pradesh, the newly-constituted Congress government has announced waiver of short-term loans up to Rs 2 lakh which is against the spirit of the complete loan waiver promise. The Rajasthan government is also likely to make an announcement on similar lines,” he said.

Ram said farmers are waiting for 10 days to lapse before holding agitations as they had done against the Raje government.

Agri-economists are also not sure of proper implementation of the government’s complete loan waiver promise as mentioned in the manifesto.

“In such conditions, loan waiver will further deteriorate the fiscal health of the state government,” said Rakesh Bhardwaj, an agri-economist.

According to the March 2018 report of Banks Committee, around 59 lakh farmers have taken loans in Rajasthan. Around 26 lakh have borrowed from cooperative and regional rural banks while 24 lakh have taken from nationalised banks while the remaining from commercial banks.

“The estimate shows that the government may need around Rs 22,000 crore initially which may go up as more and more farmers come under the net.

Altogether, there are outstanding farm loan of around over Rs 90,000 crore,” said a senior cooperative department officer. Ahead of elections this year, the Vasundhara Raje government had announced waiver of farm loans up to Rs 50,000 per farmer taken from cooperative banks, which is said to have benefitted around 30 lakh farmers.For that, the Raje government took a loan of Rs 5,000 crore from the National Cooperative Development Corporation (NCDC) to settle loans worth Rs 8,500 crore.

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