The UP government under BJP has waived off crop loans taken from banks with a cap of Rs. 1 lakh for the fiscal year 2016-17.
The ruling Bharatiya Janata Party’s (BJP) had promised during the elections to waive off crop loans owing to the impact of demonetisation and in its first cabinet meeting, the Yogi Adityanath government fulfilled the promise by announcing today the waiver worth over Rs 36,000 crore.
It covers only crop loans taken from banks in 2016-17 for seeds, fertilisers and pesticides, said UP minister Siddharth Nath Singh. told the media post the cabinet meeting.
The cost for the exchequer would be Rs 30,729 crore for bank loans and another Rs 5,630 crore in writing off non-performing assets (NPA) accumulated by the different commercial and cooperative banks in the agricultural sector, amounting to a total of Rs 36,359 crore.
The measure is expected to benefit seven lakh farmers, though there are 2.3 crore farmers in UP. In turn, the UP government would float Farmers’ Relief Bond to the tune of Rs.36,359 crore.
However, there is no clarification on microfinance loans being repaid by the farmers who had taken and failed to repay during the demonetisation period. It led to accumulation of NPAs by numerous MFIs leading to many of their ratings being scaled down.