Debt relief

The Maharashtra government is set to announce another farm loan waiver package to cover all those who were excluded by the central government's waiver package. The latest package is likely to cost between Rs 5,000 crore and Rs 7,000 crore, and "benefit" 2.7 million farmers.

I think this is more for taking out political mileage than really benefiting the farmer. Here is the proof that these things do not work out. The front page story in businessline points out that "Nearly 40 per cent of these banks’ eligible farmer-borrowers, who own over 5 acres of agricultural land, are believed to have not coughed up even the first instalment towards one time settlement in order to avail themselves of the 25 per cent rebate on their loan overdues."

Under the Debt relief scheme-2008, the government gives 25 per cent rebate on the overdue loan amount if farmers bring in the balance 75 per cent for one-time settlement.