As Opposition attacks farm loan waiver conditions, Maharashtra govt’s own cabinet note says eligibility restrictions…

Even as Opposition parties have criticised the Maharashtra government’s newly announced farm loan waiver scheme for imposing eligibility conditions that could exclude a large number of distressed farmers, the government’s own cabinet note says the scheme’s eligibility restrictions are among the reasons the state’s eventual expenditure is expected to be lower than the projected outlay, The Indian Express has learned.

A farm loan waiver means the government pays off a farmer’s outstanding debt to the bank on their behalf. The Punyashlok Ahilyadevi Holkar scheme, approved by the state cabinet on Tuesday, earmarks Rs 36,585 crore for this purpose, though the actual burden on the exchequer is expected to be lower.

Significantly, the cabinet note records that the Planning Department, which vets the financial implications of government schemes, flagged the proposal as imposing a significant financial burden on the state. The note also states that, based on information received from various banks, approximately Rs 36,585 crore would be required to provide benefits under the scheme, but that the actual financial requirement may be lower because certain eligibility restrictions have been proposed and commercial banks are expected to provide some level of concession, or haircut, on the outstanding loans of eligible farmers.

According to the government, the total overdue amount — repayments that have crossed their deadline — across 35.05 lakh loan accounts belonging to around 32.10 lakh farmers stands at Rs 40,779 crore. These accounts are spread across nationalised banks, private banks, regional rural banks, district central cooperative banks and cooperative credit societies.

The scheme has the following main components, each with its own eligibility conditions.

Under the debt waiver component, farmers with outstanding crop loans up to Rs 2 lakh (principal and interest combined) that remained overdue on September 30, 2025, and unpaid by March 31, 2026, are eligible for a complete waiver. There is no landholding limit, and the waiver applies across one or more loan accounts. The government estimates around 16.48 lakh farmers holding 17.55 lakh loan accounts fall in this category, requiring an outlay of around Rs 14,754 crore.

Farmers whose crop loan liabilities exceed Rs 2 lakh are covered under a one-time settlement component. They must first repay the amount above Rs 2 lakh; the state will then waive the balance up to Rs 2 lakh. Restructured crop loans are also covered. Eligible farmers have until March 31, 2027, to deposit the balance. The government has estimated an expenditure of Rs 5,798 crore for around 2.90 lakh farmers holding 3.69 lakh loan accounts under this component.

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The third component is an incentive for regular borrowers. Farmers who have consistently serviced their loans will receive up to Rs 50,000, but only after repaying any dues above Rs 50,000 by March 31, 2027. Farmers who benefited from the 2019 Mahatma Jyotirao Phule Shetkari Karjmukti Yojana but subsequently fell into debt are also eligible for the Rs 50,000 incentive, provided they availed crop loans between 2022-23 and 2024-25 and repaid them on time. The government has estimated an expenditure of Rs 5,808 crore for 12.71 lakh farmers under this category, and Rs 10,225 crore for around 23.63 lakh farmers holding 28.05 lakh loan accounts who have regularly repaid loans.

The scheme excludes salaried individuals earning more than Rs 25,000 a month, income taxpayers, government employees, current and former elected representatives, and pensioners drawing more than Rs 25,000 a month.

Together, the scheme’s components account for a projected outlay of Rs 36,585 crore. The cabinet note indicates the final expenditure will be lower once eligibility conditions and bank-level settlements are factored in.

“Yes, there are conditions for farmers to avail the benefits under this scheme, such as repaying the overdue amount exceeding Rs 2 lakh or paying the overdue amount exceeding Rs 50,000 for beneficiaries of the previous farm loan waiver scheme. But we are sure that all those who are needy will benefit from this scheme,” a Cooperation Department official said.

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The disclosure comes amid growing criticism of the conditions attached to the scheme. Congress state president Harshwardhan Sapkal said more than 50 per cent of the state’s farmers would be shut out. “Farmers who have taken a loan before 2019 won’t get any benefits from it. Farmers also take loans for buying animals like cows and bullocks, and for tractors and machinery. They won’t get the benefit of loan waivers. We demand that all agriculture-related loans be waived off,” he said.

Farmers’ leader Raju Shetti described the scheme as an “eye wash”. “Farmers who benefited under the 2019 loan waiver scheme will get a benefit of only Rs 50,000 in the new scheme. It is injustice to them as lakhs of farmers will be deprived of the benefit of the full Rs 2 lakh waiver. Farmers were facing an agrarian crisis and it forced them to default on loans again. The state government should immediately withdraw these stringent conditions and provide relief to all farmers,” he said.

On Saturday, Nationalist Congress Party (SP) MLA Rohit Pawar announced he would launch an indefinite hunger strike from June 12, demanding a blanket farm loan waiver without restrictive eligibility conditions. “Farmers, who have been caught in a severe financial crisis for the last three to four years, were hopeful for a loan waiver. Due to the stringent conditions imposed by the government, the majority of farmers will remain deprived of its benefits,” Pawar said in a post on X.

He said the hunger strike would begin in Pandharpur and urged people to join, expressing hope the government would reconsider the scheme’s conditions before the protest begins.

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Highly placed sources in the state government said the waiver was aimed at covering small and marginal farmers with crop loans, and that implementation would provide debt relief and improve their access to fresh credit for the kharif sowing season.

A minister, requesting anonymity, said: “This is the highest crop loan waiver in the history of Maharashtra. Despite financial constraints, the Chief Minister has taken this bold initiative considering the hardships faced by farmers.”

On the Opposition’s criticism, the minister added: “If there are some shortcomings, there is always scope for modification to ensure those deserving are accommodated.”