New MP, Chhattisgarh CMs' loan waivers to not benefit 3.5 million farmers

The schemes Kamal Nath and Bhupesh Baghel announced soon after taking oath will not help those who take loans from money lenders

By Jitendra
Published: Tuesday 18 December 2018

Credit: PixnioLiving up to their poll promises, Kamal Nath and Bhupesh Baghel, the newly elected chief ministers of Madhya Pradesh and Chhattisgarh, soon after taking oath, announced that their government will waive off farm loans. While the MP government will waive off loans of up to Rs 2 lakh, Chhattisgarh will cover short-term agriculture loans to the tune of Rs 6,100 crore.

The Indian National Congress had promised that the party would waive off farm loans within 10 days of coming to power. This promised had been made by party president Rahul Gandhi.

Soon after taking oath, Kamal Nath addressed the media and said all the defaulted farmers as well as current borrowers of government banks as well as cooperative banks will be benefitted from the up-to-Rs2-lakh waiver. So did Baghel.

But, 58 per cent of Madhya Pradesh farmers and 60 per cent of Chhattisgarh farmers take loan from institutional sources or banks, says the 2012-13 National Sample Survey Office (NSSO) report. It means that 3.42 million agriculture households would benefit from this scheme. But, there are 5.9 million agriculture household out of total 8.46 million rural households in MP.

A large number of these agriculture households—2.5 million—still take loans from money-lenders and don’t go by the formal banking channel. Similarly, only 1.5 million farmers, of total 2.5 million, will benefit in Chhattisgarh. 

The report adds that the average indebtedness among MP farmers is Rs 32,100. The loan amount of small and marginal farmers varies between Rs 9,100 and Rs 27,000 in the state. This means around 46 per cent of agriculture households in the state are indebted.

According to 70th round of the report, the average indebted farmer in the country has Rs 47,000 in loans over his head. A small and marginal farmer’s loan varies from Rs 31,100 to Rs 54,800. Around 52 per cent of agriculture households are indebted in the country.

The new CM also announced a help of Rs 51,000 to girls who get married under Chief Minister Kanyadan Yojana.

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