Giving in to the increased pressure from farmers, brought about by their continuous protests that had entered the 11th day today, the Maharashtra government has decided to waive off the loans of farmers. It may be recalled that loan waiver was one of the key demands of the farmers along with better prices for their produce. According to Maharashtra Chief Minister Devendra Fadnavis, the government is planning the biggest loan waiver in history. Speaking about the government’s mega loan waiver plan, Chief Minister Devendra Fadnavis said, “I am challenging the Congress, NCP and other parties… that this will be the biggest loan waiver in Maharashtra’s history.”
Maharashtra is already facing a mountain of debt, which will increase to 4 lakh crore by next March. Already, the government is paying 31,000 crore just as the interest on its overall debt. It may be recalled that RBI governor Urjit Patel had warned states about loan waivers, as it could ruin the finances of respective states. “The risk of fiscal slippages, which by and large, can entail inflationary spill-overs, had risen with the announcements of large farm loan waivers,” RBI had said.