Uddhav Thackeray-led government's sweeping farm loan waiver in Maharashtra will result in an outgo of Rs 45,000-51,000 crore during the current financial year, according to a report.
The newly-formed Shiv Sena-NCP-Congress government has announced a loan waiver of up to Rs 2 lakh for farmers with a cut-off date of September 30, 2019. The scheme is applicable to non-defaulting farmers who have an outstanding of Rs 2 lakh or more.
In 2017-18, 44 lakh farmers got the maximum benefit of the loan waiver while the 89 lakh farmers availed of crop loans in that year. The state has 137 lakh farmers.
This time, at least 50 lakh or more farmers may get the maximum benefit due to an increase in ceiling limit from Rs 1.5 lakh to Rs 2 lakh.
"Going by previous experience of the same under the BJP-Sena government, the cost could be at least Rs 45,000 crore, if the farmers get the maximum benefit and complete loan waivers are unchanged from the last one. But the cost could go up to Rs 51,000 crore if the number of farmers covered increases," SBI Research said in a note on Monday.
The note further said the cost could come down by Rs 12,500 crore if it postpones payments outstanding under the earlier waiver into the new one or decides to limit the coverage.
The SBI Research estimates that the number of farmers who have availed of farm loan would touch 137 lakh in 2019-20, up from 134 lakh in 2017-18 when 90 lakh farmers availed of the loans, which is at 92 lakh in 2019-20.
Of this, 90 lakh farmers will be eligible for waiver this year, as against 89 lakh in 2017-18. Of these, 44-50 lakh will get the maximum benefit of the scheme this time around, up from 44 lakh in 2017-18, according to the report. Of the total eligible farmers, 36-42 lakh will get the full benefit, up from 36 lakh in the last scheme, it added.
The average loan to be waived per farmer will go up to Rs 1,02,000 this year from Rs 77,318, which cumulatively involves an outgo of Rs 45,000-51,000 crore as against Rs 34,020 crore, the report said.
Agriculture non-performing asset is Rs 1.1 lakh crore or 12.4 per cent of overall NPAs, and various states and also once by the Manmohan Singh government had announced farm loan waivers to the tune of Rs 3.14 lakh crore in the last decade.
This means that since then the total agri NPA burden for the exchequer/banks is Rs 4.2 lakh crore and if this latest Maharashtra scheme is added, it will be at Rs 4.7 lakh crore, which is 82 per cent of industry NPA.
Disclaimer: No Business Standard Journalist was involved in creation of this content
