The previous UPA term’s massive debt waiver scheme for defaulter small and marginal farmers paid rich dividends in the elections. Finance Minister Pranab Mukherjee has now rewarded farmers who regularly pay their dues, by announcing subsidised interest rate of 6 per cent.

“I am happy to announce that for this year the government will pay an additional subvention of one per cent as an incentive to those farmers who repay their short-term crop loan on schedule. Thus, the interest rate for these farmers will come down to 6 per cent per annum,” Mukherjee said in his Budget speech, allocating Rs 411 crore more for the purpose.

He also announced the continuation of the interest subvention scheme that offers short-term crop loan of up to Rs 3 lakh at 7 per cent.

Keeping an eye on the spectre of drought , he also announced relaxation in the terms for one-time settlement component of the debt waiver scheme by extending its validity for six more months to provide relief for medium and large farmers.

The moves, which appear to be the Congress’s attempts at consolidating its goodwill after the loan waiver scheme, are likely to benefit the party in poll-bound Maharashtra and Haryana, which have Congress-led governments. In fact, Mukherjee specifically sought to placate the farmers in Maharashtra by announcing the setting up of a task force to look into ways to benefit farmers in the state who did not gain from last year’s scheme. “It is learnt that in some regions of Maharashtra, a large number of farmers had taken loans from private money lenders and the loan waiver scheme did not cover them. The matter requires special attention,” Mukherjee said.

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