The Devendra Fadnavis-led Maharashtra government today agreed to waive farm loans of small and marginal farmers worth Rs 30,000 crore.The government has also set up a panel for implementation of the scheme. As many as 1.07 crore farmers in the state with less than five acre 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.State government was under immense pressure from farmers who were protesting for the loan waiver for the past couple of weeks.Even as some government officials had estimated that the waiver will make a Rs 30,000-crore hole, Maharashtra's Finance Minister Sudhir Mungantiwar had said the state is committed to helping the farmers.Speaking over the issue, couple of days back, Mungantiwar had said the government is looking to cover the burden through an additional Rs 10,000 crore mobilisation through non-tax revenues, 14 per cent growth in GSDP expected during the fiscal and also savings on expenses. "The cost of the waiver is a necessity given the plight of the farmers and also the number of people dependent on agriculture," he said, adding over 2.5 crore people are engaged in farming at present.This may also hit banking sector, which is already reeling under a NPA burden of over Rs 6 lakh crore.In April, UP government had announced the waiver of Rs 36,000-crore loan, which had boosted the demands of similar loan waivers in other states.Protests for similar farm loan waiver are also going on in Madhya Pradesh.

Source: Economic Times June 11, 2017 11:34 UTC