26K cr needed for farm loan waiver in State

The Odisha Government would require a whopping amount of over Rs 26,000 crore if it decides to go in for total agriculture loan waiver, reveals a leading banker.

As per banking figures, the total outstanding farm loans by March 31, 2017 was Rs 26,600 crore on over 54 lakh farmers. While on April 5, 2017, Chief Minister Naveen Patnaik had said that the State Government would examine the matter of “crop loan waiver”, Cooperation Minister Surjya Narayan Patro outright rejected any loan waiver on the floor of the State Legislative Assembly on March 29, 2018.

However, Agriculture Minister Pradeep Maharathy responded in a positive manner over allowing loan waiver to the farmers.

He said discussions over crop loan waiver are underway and a decision would be announced soon. “Ours is a pro-farmer Government and is always concerned about the development of farmers,” he added. However, a waiver decision has to be taken by the Chief Minister and the State Cabinet as it requires a huge sum of money.

Preliminary calculations show that if a decision is taken to waive entire agricultural loans at one go then it would cost the State exchequer more than Rs 26,000 crore. There is a tremendous pressure on the State Government to announce loan waiver in the agriculture sector, which is facing a tough time due to adverse weather conditions and poor farm yield.

With more and more farmers resorting to suicide, opposition parties are demanding loan waiver, for which the Government is under pressure to take a decision. While the BJP is demanding loan waiver, the Congress has announced that if it comes to power, there would be a total loan waiver.

There are more than 60 lakh farmers in the State; however, all of them do not go for loans, said a senior official. At least Rs 39,819 crore of crop loan was disbursed in 2016-17, says the latest State Economic Survey report.

Now, various options are being worked out and the minimum amount required for loan waiver is being calculated by officials.

As per official figures, if each farmer is allowed a waiver of Rs 20,000, the minimum amount required would be nearly Rs 10,000 crore.

However, if the farmers are allowed waiver of Rs 50,000 each, the amount would be Rs 26,000 crore.

With several other State Governments having decided to wave farm loan, the Odisha Government in all likelihood may go in for this populist measure, officials feel.

Interestingly before resigning as Chief Minister of Karnataka, BS Yuddyurappa had on 19 May announced that he would waive farm loan to the extent of Rs 1 lakh for each farmer.

Several BJP-run States, including Uttar Pradesh, have already waived farm loans. In such a situation, the BJD-ruled Odisha Government would have to consider loan exemption as the State will face elections in 2019, feel political analysts.

Waiver of loans amounting to Rs 2,615.23 crore had been extended to over 19.79 lakh farmers of the State in 2008 by the then UPA Government at the Centre.