Maharashtra will waive Rs340bn ($5.27bn) of farm loans, the latest state to offer relief to farmers reeling from losses caused by bad weather.
The state, ruled by Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP), has decided to write off debts up to Rs150,000 ($2,326) for 8.9mn farmers, Chief Minister Devendra Fadnavis told reporters after a cabinet meeting yesterday.
The state will settle farmers’ loans with banks, making 90% of farmers eligible for fresh borrowing, Fadnavis said.
Earlier this month, the state had announced that it would write off loans of all farmers after striking farmers cut milk and vegetable supplies to cities like Mumbai.
Fadnavis called the loan waiver decision a “historic step” and named the package after Maratha warrior king Chhatrapati Shivaji.
“Farmers could not repay loans due to losses they incurred following low rains and hailstorm. So we have taken this historic decision to help farmers. No other state has given such a large waiver,” he said.
The decision was taken after a meeting between the BJP and its ally Shiv Sena chief Uddhav Thackeray, Nationalist Congress Party chief Sharad Pawar and other leaders in the opposition.
Fadnavis added that all ministers and legislators will give a month’s salary to support the loan waiver.
Modi, who had promised to double farmers’ incomes over five years, remains a popular leader three years into his term.
But unrest has flared in states ruled by his party, catching regional leaders flat-footed.
In the central state of Madhya Pradesh five farmers were shot dead during protests earlier this month.
India’s most populous state of Uttar Pradesh in April decided to waive $5.6bn of farm loans, while northern state of Punjab earlier this week decided to write off $1.5bn of loans to farmers.
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