Almost a fortnight after taking oath, Uttar Pradesh chief minister Yogi Adityanath will hold his first cabinet meeting on Tuesday and major promises made in the BJP’s Lok Kalyan Sankalp Patra (election manifesto) are likely to be given shape in the meeting. According to information, a list of 1.5-crore farmers has been finalised and sent to the chief minister and the final proposal will be presented before the cabinet at its maiden meeting. The proposal will also place some cut-off date for the waiver.
In order to waive off the loans of marginal and small farmers, it is estimated that the government will need approximately `75,000 crore. Among the options that the state government is looking at, the most probable is raising bonds from banks and other financial institutions. However, since the state government has a limit of seeking borrowings under the FRBM Act, it has request the Centre to keep the bonds out of the purview of the FRBM Act. According to sources, the Centre has agreed to give the state government certain concessions.
Sources in the government said that since the amount is a huge one, it would be difficult to handle the burden of loan waiver in a single financial year. According to information, the state government is likely to split the amount.
“The state will have to bear an additional burden of `25,000 crore every year to clear off the loans,” said a source.
The other option is paying the farmers’ loan amounts directly to the banks. For this, it is seeking a grant from the Union finance ministry through Demand No 32 under Transfers to State head.
It is to be noted that during the Assembly poll campaign in Uttar Pradesh, Prime Minister Narendra Modi had promised that if a BJP government is elected, a decision on waiving off farm loan of small and marginal farmers would be taken in the very first meeting of the state cabinet. Since this is a major decision, and involved seeking the Centre’s consent, the state cabinet meeting was put off so that a consensus could be built on it. In fact, it was for this major decision that the state cabinet meet was postponed despite a fortnight having passed after the government took over on March 19.
You might also want to see this:
It may be mentioned that Union finance minister Arun Jaitley had ruled out farm loan waivers by the Centre but added that the state governments would have to utilise their own resources for any such move. According to rough estimates, of the `75,000-crore worth of loans extended to farmers in the state, approximately `8,000 crore were disbursed by state cooperative and primary agricultural credit societies. The rest was done by nationalised banks.