Low finances keeping farm loan waivers on hold

Fiscal deficit, rising debt and investment in big infrastructure projects are responsible, say sources

The allotment of nearly ₹15,000 crore for agriculture in the State budget on Saturday is unlikely to end the face-off between the government and the Opposition in the Assembly, with the former not waiving off farm loans. The House will reconvene on Wednesday.

Finance Minister Sudhir Mungantiwar said during his budget speech that 31.57 lakh of the State’s 1.36 crore farmers are under debt, and face the risk of being left out of the ambit of institutional credit. “It is estimated that the total institutional debt is ₹30,500 crore,” he said.

Government sources said the State’s finances don’t support farm loan waivers. The State government is yet to implement the Seventh Pay Commission recommendations, for which it will need an extra ₹21,000 crore. With State revenue hit by demonetisation, the government has not announced big projects and schemes. “We are committed to implement it [Seventh Pay Commission salary hikes] and we will do it at the right time,” Chief Minister Devendra Fadnavis said.

 

Farm loan waivers and salary hikes for government employees seem all the more distant, given the high fiscal deficit, rising debt and investments in several big-ticket infrastructure projects. In his budget speech, Mr. Mungantiwar said Central assistance has been sought for waiving off farm loans. A day before the budget was tabled, Mr. Fadnavis met Union Finance Minister Arun Jaitley to discuss the issue that has stalled Assembly proceedings.

 

However, Mr. Mungantiwar’s assurance of cooperation for Central government initiatives on farm loan waivers did not appease a disruptive Opposition, which demanded immediate action. Leader of Opposition and senior Congress leader Radhakrishna Vikhe-Patil said the State government had promised to ensure self-respect for farmers in the current fiscal year, but hasn’t done so. “In 2016, more than 3,000 farmers committed suicide while around 400 ended their lives in the first two months of 2017. The government has not kept its promise of extending loan waivers.”

The Shiv Sena, which has aggressively been pursuing loan waivers for farmers, was silent on Budget Day to the extent that none of its leaders spoke on the budget. According to sources, the party will reveal its stance if the Opposition asks for a vote on the budget in the coming week.