Mumbai, July 10 (IANS) In a major relief to the agrarian community, the Maharashtra Chief Minister Devendra Fadnavis on Friday announced to modify a crop loan waiver scheme aimed at pulling distressed farmers out of debt traps and keeping them away from private moneylenders.

Brushing aside criticisms regarding the timing of the announcement, the Chief Minister emphasised that the decision was driven solely by farming distress and not by electoral gains, saying, “We could have waited until 2029 since there are no immediate elections, but we decided to act because our farmers are in deep trouble.”

The comprehensive package will include a complete farm loan waiver, a one-time settlement (OTS) option, and incentive bonuses for farmers who clear their dues regularly.

He was replying to a debate on the last week motion in the State Assembly.

The modified Punyashlok Ahilya Holkar Loan Waiver Scheme significantly expands the safety net compared to the previous Mahatma Phule Loan Waiver Scheme.

Under the older scheme, the waiver cap was strictly set at Rs 2 lakh; if a farmer owed even a single rupee over the Rs 2 lakh threshold, they were completely disqualified from the benefits.

The modified scheme removes this rigid barrier.

Farmers with outstanding balances exceeding Rs 2 lakh will now also receive relief, provided they settle the excess amount, ensuring they are not left out of the banking fold.

In a landmark move, the state government has extended the cutoff date for eligible defaults.

While the waiver was originally slated to cover defaults up to the financial year 2025-26, it has now been extended to include overdue crop loans up to the 2026-27 financial year — a decision unprecedented in the state’s history.

Countering Opposition’s claims that the scheme would only benefit 12,000 to 13,000 farmers while ignoring 36 lakh others, the state government dismissed these figures as “completely baseless”.

He clarified that this historic scheme will extend a massive financial benefit of Rs 36,585 crore to more than 56 lakh farmers across the state.

This is in addition to the state government’s ongoing support, which includes Rs 25,000 crore annually in electricity waivers and a total budgetary outlay of Rs 95,000 crore across various agricultural departments and subsidies.

While the state government reiterated its commitment to relief, it also addressed critical concerns regarding credit discipline and the health of co-operative banks.

Maharashtra holds a unique record of implementing loan waivers in 2017, 2020, and now in 2026.

However, continuous waivers run the risk of harming the banking system, as seen in Nagpur, where a past banking scam has severely crippled fresh crop loan disbursement to local farmers.

To maintain banking liquidity and instil fiscal discipline, the state government has maintained certain exclusion criteria.

Farmers who recently benefited from consecutive immediate loan waivers (such as the exclusion models followed between the 2008 national waiver and the 2009 state waiver, or between 2017 and 2019) will be omitted to ensure credit discipline, the Chief Minister said.

Following intense representations from MahaYuti alliance legislators to remove the Rs 50,000 cap for certain categories, the state government agreed to expand the limit.

While this adjustment adds a fiscal burden of Rs 4,000 to Rs 5,000 crore, it ensures that an additional two lakh farmers — who would have otherwise been excluded — are brought under the security blanket.

Consequently, those previously limited to a Rs 50,000 waiver under the Mahatma Phule scheme will now be eligible for relief up to Rs 2 lakh.

“A loan waiver is a necessity of the hour. While no loan waiver has ever made a farmer rich, its true objective is to empower them to borrow from formal institutions again, ensuring they never have to knock on a private moneylender’s door. We must rescue the farmer, but we must also keep the banking system alive,” Chief Minister Fadnavis remarked.

–IANS

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