[Milk was spilled on roads at many places in Maharashtra where farmers were on protest since last ten days demanding loan waiver and fair price of their produce. (Photo/Twitter)]
Mumbai: The Bhartiya Janata Party (BJP) led government in Maharashtra on Sunday agreed to waive off farmers' loan worth Rs.30,000 crore. The decision came after ten days of violent protest by various organisations of farmers.
The decision was taken in a meeting of steering committee and high-powered ministerial group led by Revenue Minister Chandrakant Patil.
The protesting farmers had given the state government time till Monday to meet their demands. They had also threatened to intensify their stir which also included disrupting rail traffic.
A loan waiver was on the top of the list of demands by farmers who have been protesting against a lack of fair price for their produce.
More than 1.07 crore farmers in the state with less than five acres of land holding will be eligible for the waiver.
The loan waiver for small and marginal farmers will push up states' fiscal deficit to 2.71% (budgeted: 1.53%) in FY’18 of gross state domestic product (GSDP), India Ratings said in a report.
The farm loan waiver by the government of Maharashtra would have a substantial effect on its finances.
"A waiver of the Rs 30,000 crore owed by small and marginal farmers would push up the government's fiscal deficit by 2.7 per cent in 2017-18, from the budgeted 1.53 per cent of gross state domestic product (GSDP). To manage this, it might have to cut on capital expenditure", India Ratings said in a report.
"The debt/GSDP will rise to 17.44 per cent against the budgeted 16.26 per cent in FY18. The impact will depend on whether the entire loan waiver is absorbed in FY18 or is staggered over three to four years," said the report.
The announcement had also drawn a warning from the Reserve Bank of India as Governor Urjit Patel said the risk of going down the "slippery path" of waiver could dissipate gains made by states over the last few years and asked governments to "tread very carefully.
Meanwhile, leaders of the Akhil Bhartiya Kisan Sabha (AIKS) said that the farmers' protest has not been called off but postponed till July 26.
"We will keep a watch on the government to ensure our demands are met. If the government fails to accept our demands by July 26, a more intense agitation will be launched," Swabhimani Shetkari Sanghatana (SSS) MP Raju Shetty said.