The state cabinet of Jharkhand approved a loan waiver up to Rupees 50,000 for 9.07 lakh farmers. The state cabinet has earmarked Rupees 2,000 crores for the purpose.
According to the Jharkhand Government, there are 12.93 lakh farmers in the state. They have loan dues amounting to Rupees 5,800 crores.
Other Approvals by Cabinet
- The state Cabinet also approved the replacement of PM Kisan Bima Yojana with its own Fasal Rahat Yojana. The Jharkhand Government has allocated Rupees 100 crores for Fasal Rahat Yojana.
- Recent amendment of Jharkhand Regional Development Authority was approved.
- Also, the state cabinet approved of the decision that the Jharkhand Government under the Land Pooling Policy will not acquire any land. Also, under the policy, the Government will return a part of the developed land to the original owners.
About the Benefits of Loan Waivers
- Drop in farmers income, rising costs and increasing incidence of indebtedness are increasing farmer suicides especially among small and marginal farmers. The loan waivers will bring in temporary relief.
- The two major factors of farmer crisis are falling income and indebtedness. According to NABARD’s All-India Rural Financial Inclusion Survey, the major sources of income of farmers are wages and cultivation. The survey says that the monthly income of Agricultural households from cultivation remained almost constant from 2013 to 2017. It was Rupees 3081 in 2013 and Rupees 3140 in 2017.
- The large agricultural farms usually receive that way was through loan restructuring or one-time settlement. However, the small & marginal farmers are not benefited through these measures. Therefore, it is essential to bring in loan waiver.
Concerns of loan waiver
- The loan waivers benefit only those farmers who have taken loan from the institutional sources. According to the NSSO survey, around 52 per cent of Agricultural households were indebted. Of these only 60 per cent had taken loan from institutional sources.
- The Loan waivers have reputational consequences. They adversely affect the repayment disciplines of the farmers.
- The earlier loan waivers have not increased productivity or investment in agricultural sector. The first loan waiver in India was launched in the year 1990.
- The Loan waiver increase the non-performing Assets of banks.
- Loan waivers increase fiscal deficit of government.
Farm Loan Waiver Scheme Farm Loan Waiver Scheme