Maharashtra Broadens Farm Loan Waiver, Lifting Debt for 13 Lakh Farmers

In a significant move, the Maharashtra Cabinet, led by Chief Minister Devendra Fadnavis, approved major modifications to its ambitious Punnyashlok Ahilyadevi Holkar Shetkari Karjmukti Yojna 2026 on Tuesday. These changes are set to provide much-needed relief to an additional 13 lakh (1.3 million) farmers by removing the earlier Rs 50,000 cap for beneficiaries of the 2019 loan waiver scheme, allowing them full benefits up to Rs 2 lakh. The cabinet also eased conditions for incentive payments, extending eligibility to 23 lakh more farmers who demonstrated regular repayments in previous years, marking a substantial expansion of the Rs 36,585 crore scheme. The modifications, initially announced by CM Fadnavis in the State Assembly on July 10, come after sustained criticism regarding the scheme's stringent eligibility criteria. While the government aims to help financially distressed farmers rejoin the formal banking system and escape the clutches of private moneylenders, the decision will impose an additional fiscal burden of Rs 3,000 to Rs 5,000 crore on the state exchequer. Critics, like NCP SP MLA Rohit Pawar, had earlier warned that the scheme's initial conditions would exclude a large number of cultivators, highlighting the ongoing tension between farmer relief and fiscal prudence. With these modifications now cleared, state Agriculture Minister Dattatreya Bharne has indicated the waiver is expected to be rolled out before July 30, despite previous delays that left farmers anxious. This broadened scope, affecting an estimated 56 lakh farmers overall, aims to address long-standing agrarian distress across Maharashtra. However, the recurring nature of such large-scale waivers continues to spark debate among economists and the Reserve Bank of India regarding their long-term impact on credit culture and state finances.