Making good on a promise made by Prime Minister Narendra Modi during the election campaign in Uttar Pradesh, the new BJP govt in the state in its very first cabinet meeting has waived off crop loans worth over Rs 36,000 crore for farmers taken from banks with a cap of Rs. 1 lakh for the fiscal year 2016-17.
Sources describe the decision as prompt and bold. It covers crop loans taken from banks for seeds, fertilizers and pesticides, says a government source.
The cost for the exchequer would be Rs 30,729 crore for bank loans and another Rs 5,630 crore in writing off non-performing assets (NPA) accumulated by the different commercial and cooperative banks in the agricultural sector, amounting to a total of Rs 36,359 crore.
The measure is expected to benefit seven lakh farmers, though there are 2.3 crore farmers in UP. In turn, the UP government would float Farmers’ Relief Bond to the tune of Rs 36,359 crore.
However, there is no clarification on micro finance loans being repaid by the farmers who had taken and failed to repay during the demonetization period.