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Mega package for a mega problem: Maha govt's 10,512 crore gift to farmers

Ashwin Aghor | Updated on: 14 February 2017, 1:44 IST

The gift

  • Maharashtra CM Devendra Fadnavis has announced a Rs 10,512 crore relief package for farmers
  • The agricultural sector has been reeling under four successive years of drought

The debate

  • The Opposition and govt allies Shiv Sena and SSS wanted a loan waiver
  • However, the CM says this hasn\'t helped out farmers in the past

More in the story

  • Will this package really benefit farmers or be gobbled up by financial institutions?
  • What infrastructural improvements is the govt planning to make to help farmers?

The Maharashtra government has announced the biggest-ever relief package for farmers who have been suffering due to drought and low yield over the last four years.

Chief Minister Devendra Fadnavis announced the package, worth Rs 10,512 crore, in the state assembly late on Wednesday, 16 December. And unlike previous packages, the advantage this time is that farmers themselves are expected to benefit, not financial institutions.

MUST READ: A farmer's wake-up call to India: try to understand why we die

As a result of the successive droughts, most farmers in Maharashtra, especially in the dry Marathwada and Vidarbha regions, are neck deep in debt, having borrowed from banks as well as moneylenders. This has led to thousands of farmer suicides, which have put the heat on the state government.

The package

The package announced hints at encouraging investment in the agriculture and irrigation sectors in the state.

Here's a breakdown of what the package will bring to 53.19 lakh farmers in 15,747 drought-hit villages.

- Of the total Rs 10,512 crore, farmers will receive Rs 7,412 crore directly, in the form of savings certificates.

- The remaining amount will be distributed through various grants and rebates.

- Rs 250 crore will be allotted for the creation of farm ponds, and Rs 100 crore for the purchase of paddy

CM Devendra Fadnavis announced the package in the state assembly after a long and heated debate

- The state government is offering 33.5% discount on current electricity bills for agricultural pumps, which means a direct assistance worth Rs 353 crore to 19.45 lakh farmers.

- It will waive off education fees for farmers' children, helping 9.5 lakh students and their families save Rs 40 crore.

- Rs 100 crore has been allocated for the Jalayukta Shivar Abhiyaan

- Rs 1,000 crore has also been set aside for creating infrastructure for power supply to water pumps across the state.

- All farmers in the state will be covered under the Gopinath Munde Farmers' Accident Insurance Scheme. The compensation under this scheme has been doubled to Rs 2 lakh.

The loan waiver argument

Opposition parties have been demanding loan waivers for farmers, and had strategically cornered the state government in the winter session of the assembly. The government was facing sharp resistance from not only Opposition parties, but its own allies like the Shiv Sena and Swabhimani Shektari Sanghatana too had joined in the chorus demanding a loan waiver.

However, the government remained firm, saying that loan waivers weren't the solution, as the problem could arise year after year. It also maintained that a loan waiver would only benefit financial institutions and big farmers. This led to a day-long heated debate in the assembly, before Fadnavis announced the package.

Also read - No permission for suicide: has Fadnavis got a new deal for farmers?

The Congress and NCP criticised the package. The leader of the Opposition, Radhakrishna Vikhe-Patil, said: "The government has claimed to have taken many steps to help farmers over the last one year. But the fact is that the number of suicides is the highest in the history. There is large-scale discontent among the general public about the government. Denying a loan waiver to farmers despite all these facts is nothing but a betrayal."

But Fadnavis presented certain facts to counter this line of argument.

In the year 2008, the then UPA government at the Centre and the Congress-NCP government in Maharashtra had announced a Rs 7,000 crore loan waiver. The funds were transferred to financial institutions in the name of farmers, but it never reached the real beneficiaries.

"The package announced this time will directly reach the farmers," Fadnavis said.

The govt didn't succumb to pressure from the Opposition and its allies to opt for a loan waiver

"There is no substantial proof that a loan waiver helps in reduction of farmer suicides. During the Congress-NCP regime in 2010, a total of 1,068 farmers committed suicide, despite loan waivers given between 2006 and 2008. Despite a drought over the last four years, the total number of farmer suicides is 1,060, whereas 1,449 farmers had committed suicides in the year 2006," Fadnavis said.

Fadnavis has previously pointed out that the leaks in the financial institutions have been taken care of, to prevent diversion of relief funds to a handful of big farmers and institutions controlled by powerful political leaders.

So this time, instead of going for a populist package, the government has brought in various short and long-term projects to boost investment in the power and water sectors.

The CM also said the government has introduced a mechanism to include a majority of the farmers in credit schemes.

"This will make them eligible for loans from banks, and they need not borrow money from private moneylenders at higher interest rates and face subsequent mental harassment for recovery," he said.

More in Catch:

Quick guide: how to obey SC orders and stop farmer suicides

Cotton farmer suicides: Punjab has been here before and not learnt

Karnataka sugarcane farmer suicides: what can be done to stop the rot

First published: 18 December 2015, 7:50 IST
Ashwin Aghor @CatchNews

Journalist based in Mumbai.