The Maharashtra government has announced major changes to its latest farm loan waiver programme, removing the earlier eligibility ceiling linked to outstanding dues and extending the cut-off period for overdue loans.
Chief Minister Devendra Fadnavis made the announcement in the state legislative assembly while replying to a debate on the opposition-sponsored ‘last week motion’. He said the revised provisions under the Punyashlok Ahilyadevi Holkar Farm Loan Waiver Scheme are expected to benefit around 56 lakh farmers across the state.
Loan waiver eligibility expanded
Fadnavis said the previous condition under which farmers with dues exceeding Rs 2 lakh were excluded has been removed. According to him, this change will allow thousands of farmers who had earlier missed out on the benefits because of the eligibility ceiling to receive assistance.
The chief minister also announced that the scheme’s cut-off for overdue loans has been extended. Earlier applicable to pending dues until the 2025-26 financial year, the scheme will now include loans outstanding up to the 2026-27 financial year.
Government defends need for loan waiver
Defending the decision, Fadnavis said farm loan waivers are intended to help financially distressed farmers regain access to institutional credit and prevent them from falling into the hands of private moneylenders.
He said the government chose to introduce the scheme despite there being no state elections until 2029, as farmers were facing financial challenges.
The chief minister also highlighted that Maharashtra provides an annual electricity subsidy of around Rs 25,000 crore to farmers, while agricultural subsidy schemes together account for nearly Rs 95,000 crore.
Scheme to provide Rs 36,000 crore in assistance
Rejecting criticism that only a limited number of farmers would benefit, Fadnavis said the revised scheme would provide assistance worth approximately Rs 36,000 crore to around 56 lakh farmers.
He recalled that the Mahatma Jyotirao Phule farm loan waiver scheme launched in 2019 limited eligibility to overdue loans of up to Rs 2 lakh, with farmers losing eligibility even if their dues exceeded the cap by a single rupee. Around 32 lakh farmers had benefited under that programme, he added.
According to the chief minister, Maharashtra has implemented major farm loan waiver schemes in 2017, 2020 and 2026.
Government seeks balance between farmer relief and banking stability
Fadnavis acknowledged that repeated loan waivers could encourage delayed repayments and affect the financial health of cooperative banks.
He said the government considered suggestions to prevent previous beneficiaries from availing future loan waiver schemes but ultimately decided to maintain a balance between supporting farmers and safeguarding the banking system.
The chief minister noted that beneficiaries of the 2017 state loan waiver were excluded from the 2019 Mahatma Phule scheme, while farmers covered under the 2008 national loan waiver were also excluded from Maharashtra’s 2009 programme.
Farmers under earlier scheme also to receive expanded benefit
Responding to demands from ruling alliance legislators, Fadnavis said removing the existing Rs 50,000 repayment-related condition would increase the financial burden on the state by an estimated Rs 4,000-5,000 crore.
However, he announced that farmers who had received benefits under the Mahatma Phule loan waiver scheme would now also be eligible for waiver benefits of up to Rs 2 lakh under the revised framework.
He added that representatives from the banking sector were consulted before finalising the scheme. The state plans to spend Rs 20,000 crore during the first year, Rs 22,000 crore in the second year and Rs 25,000 crore thereafter as part of its broader support for the agriculture sector.