Finance Commission seeks detailed note on farm loan waivers from Madhya Pradesh

Economy


NEW DELHI: The 15th Finance Commission has sought a detailed “note” from the Congress-run Madhya Pradesh government on its ambitious farm loan waiver scheme. The state, not seen as financially robust over the last few years, had last year announced Mukhyamantri Rin Maafi Yojana to offer loan waiver of up to Rs 2 lakh each to farmers who took short-term crop loans from nationalised or corporate banks in the state as on March 31, 2018.

The Kamal Nath led government which announced the scheme soon after coming to power in late 2018, set aside Rs 5,000 crore in its budget for the scheme that was renamed ‘Jai Kisan Fasal Rin Maaf Yojana’. N K Singh, chairman of the 15th Finance Commission, confirmed the development.

“Farm loan waivers seems to be all over,” he told ET. “In the first term of Modi government some waivers came and former FM then said it is for them (states) to see how they can accommodate it within their fiscal parameters. So if they have fiscal space, that’s their business. No special permission under Article 293 (3) has been given for farm loan waiver to MP or any other state. They have to see and consider whether they have fiscal space and room for the additional outlay they have announced. But, yes, a note has been sought from them to understand this better.”

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The 15th Finance Commission is currently in Madhya Pradesh, holding consultations before making its final proposals for devolution of funds to states between 2020-25. Singh termed the state’s fiscal situation as an “enigma” because while it has seen an increase in farm productivity under a stable BJP government for 15 years, there was no significant gain in terms of per capita income and the state still trailed on most human development indices



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