Union Finance Minister Arun Jaitley has turned down the request of Chief Minister Edappadi K. Palaniswami for waiver of loans for farmers.
Sources said that in his reply to the Chief Minister a few weeks ago who had sought the Centre’s help for loan waiver, Mr. Jaitley stated that there was “no proposal under consideration” of the Centre. However, he explained to the Chief Minister various measures taken by the Union government to alleviate the hardship of farmers.
Pointing out that short term crop loans would be available effectively at an interest rate of 4%, the Finance Minister also referred to another scheme of 2% interest subvention which was meant to provide relief to farmers affected by natural calamities. The concession would be in force for the first year on restructured amount of loans. In respect of Tamil Nadu, the deadline for rescheduling of loans has been extended till August end.
For over three months, the issue of loan waiver has been a subject of the political discourse in the State and political parties and farmers’ associations have been demanding the waiver.
Even though the Tamil Nadu government, in June 2016, ordered the waiver of short term, medium-term and long term loans, taken through cooperative institutions, to the tune of around ₹5,320 crore for about 12.lakh marginal and small farmers with no ceiling, the issue of crop loan waiver acquired greater prominence this year after a spate of developments..
Monsoon failure
As far as Tamil Nadu is concerned, the demand had become vociferous since the northeast monsoon (October-December) of 2016 failed miserably, leaving agriculturists in distress. Besides, in the water year of June 2016-May 2017, the State received much less Cauvery water than what it should have under the Cauvery Water Disputes Tribunal’s final order.
When other States such as Maharashtra, Uttar Pradesh and Punjab governments had, in the recent months, decided that they would write off the loans for agriculturists, Mr. Jaitley had even publicly ruled out farm loan waiver by the Centre.
In April this year, a Division Bench of the Madras High Court questioned the Tamil Nadu government’s decision to restrict the waiver of cooperative crop loans to farmers owning up to five acres and directed the latter to extend it to “other farmers” or big farmers, numbering around 3 lakh farmers. The State government had contended before the Court that such a move would cost ₹1,980.33 crore additionally. Later, it had moved the Supreme Court, which, in July, stayed the operation of the High Court’s order.
