Maharashtra removes Rs 2 lakh cap in farm loan waiver scheme
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Maharashtra Chief Minister Devendra Fadnavis on Friday announced changes to the state's farm loan waiver scheme, removing the condition that overdue loans should not exceed Rs 2 lakh to qualify for relief.
Replying to a debate in the legislative assembly, Fadnavis said the decision would benefit thousands of farmers who had been excluded under the earlier eligibility criteria.
He also announced that the cut-off for overdue loans has been extended from the 2025-26 financial year to include dues outstanding up to 2026-27.
The chief minister said the Punyashlok Ahilyadevi Holkar Farm Loan Waiver Scheme is expected to benefit about 56 lakh farmers with assistance worth Rs 36,000 crore.
Defending the scheme, Fadnavis said loan waivers were necessary to help distressed farmers regain access to institutional credit and prevent them from falling into the hands of private moneylenders.
He said the previous Mahatma Jyotirao Phule farm loan waiver scheme of 2019 limited eligibility to overdue loans of up to Rs 2 lakh, excluding farmers whose dues exceeded the cap even by Re 1. Around 32 lakh farmers benefited under that scheme.
Fadnavis said Maharashtra is the only state to have implemented major farm loan waivers in 2017, 2020 and 2026.
He acknowledged that repeated loan waivers could encourage delayed repayments and weaken the financial health of cooperative banks. The government had considered excluding previous beneficiaries from future schemes but decided to strike a balance between supporting farmers and protecting the banking system.
Responding to demands from ruling alliance legislators to remove the Rs 50,000 repayment-related condition, Fadnavis said doing so would impose an additional burden of Rs 4,000 crore to Rs 5,000 crore on the state exchequer. However, he announced that farmers covered under the Mahatma Phule loan waiver scheme would now also be eligible for waiver benefits of up to Rs 2 lakh.
He added that the state plans to spend Rs 20,000 crore in the first year, Rs 22,000 crore in the second year and Rs 25,000 crore thereafter as part of its support to the farm sector.