Farm loan waivers threaten to derail state finances

Trend began after UP announced a farm loan waiver of Rs 36,000 cr & got stronger with Maharashtra

The chorus of farm loan waivers across several states has aggravated concerns about state-level finances. The trend, which started after Uttar Pradesh announced a farm loan waiver of Rs 36,000 crore in March and got stronger with Maharashtra agreeing to a Rs 30,500 crore waiver earlier this month, is indeed worrisome. Farmers in several other states such as Madhya Pradesh and Karnataka have also pitched for waivers. According to an analysis by IndiaSpend, the amount involved could be a staggering Rs 3.1 lakh crore — big enough to fund the Prime Minister’s Gram Sadak Yojana, a national rural road scheme,