After Congress governments were voted in in Madhya Pradesh, Rajasthan and Chhattisgarh, they announced loan waiver of Rs 35,000 crore, Rs 18,000 crore and Rs 6,100 crore respectively. These three states account for about a quarter of India’s tractor sales.Furthermore, several state governments have increased the subsidy support to tractor purchases. Hence, the low participation of NBFCs may have only a limited impact on tractor sales.Historically, states offering loan waivers have seen tractor volume growth. Industry volume was boosted in FY09 and FY10 when New Delhi announced a national farm loan waiver in 2008. Tractor volume growth improved in Andhra Pradesh, Telangana, and Uttar Pradesh in the last two years after the respective state governments announced loan waivers.

Source: Economic Times January 07, 2019 04:41 UTC