Rajasthan Chief Minister Vasundhara Raje on Thursday launched a crop loan waiver scheme, considered the biggest sop in the run-up to this year’s Assembly election, by distributing certificates to eligible farmers at a State-level function in Banswara. The scheme, set to benefit 2.93 million farmers, will cost ₹8,000 crore to the State exchequer.
The much-touted scheme ran into rough weather shortly before its implementation with the BJP government scrambling to arrange funds for the waiver. After the initial efforts to raise the money failed, the National Cooperative Development Corporation sanctioned ₹5,000 crore as loan to enable the State government to fulfil its promise made to farmers.
Ms. Raje had announced one-time loan waiver up to ₹50,000 each for small and marginal farmers from their outstanding short-term cooperative debts in the 2018-19 State budget presented in the Assembly on February 12 this year. The scheme was later extended to cover all farmers.
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Written guarantee
The State government has provided a written guarantee to the Apex Cooperative Bank to secure the loan, which is to be repaid to the NCDC in two instalments within 270 days. The period can be extended by 90 days, after which the penal interest will be payable.
About 1,09,000 eligible farmers, whose loans worth ₹250 crore have been waived, live in Banswara district.
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An earlier plan to hold special camps in each of the 33 districts in the State from May 26 was shelved when the Cooperative Department’s efforts to arrange the funds did not yield any results. Even the National Bank for Agriculture and Rural Development did not show any inclination to give credit in view of its guidelines.
Addressing the function at College Ground in Banswara, Ms. Raje said her government was the first in the State to waive farmers’ loans of ₹50,000 each. “We are working for farmers’ welfare with the resolve to increase their income twofold. We have also reduced interest rate on the loans obtained from primary land development banks from 12% to 5.5%,” she said.
Ms. Raje also distributed new loan sanction letters of ₹50,000 each to some of the farmers. She announced that a Farmers' Loan Relief Commission would be appointed shortly in the State as a permanent institution for the benefit of farmers who were unable to repay their loans. The Commission will consider the cases on merit and provide relief to agriculturists.
Political benefit
The Congress has described the distribution of loan waiver certificates as the ruling BJP’s exercise to reap political benefit in the poll year. Pradesh Congress vice-president Archana Sharma said the scheme would neither benefit thousands of farmers who had obtained loans from the institutions other than the cooperative banks, nor would it provide succour to the families of over 90 farmers who had committed suicide in the last four years.