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The UP government has announced a waiver of farm loans of up to Rs. 1 lakh in value. This is being done as a means of fulfilling a campaign promise that the BJP had made. This will help to improve upon how well farmers in the state are able to manage their businesses. Much of this focuses heavily on ensuring that there are no issues over what may develop over time.
The move is going to benefit 2.25 crore farmers around the state. A vast majority of those farmers are in the small and marginal category of farmers. They include farmers that have been unable to pay off loans due to significant crop losses. It will cost about Rs. 36,000 crore to implement this new plan.
This is a rather high total that is designed to improve upon how the state’s economy works. As the UP farmer program works, the state receives revenue from the crops that are raised. By working with a plan to manage the crops, it will be easier for the state government to grow and thrive over time. This can make a world of difference when handled the right way and without concerns.
A Campaign Promise
The BJP had planned support for smaller farmers throughout the last campaign. This move for a waiver meets a promise that the party had made. This is especially substantial as close to 90 percent of the farmers in the state are to benefit from the plan. This is to help with getting the most out of the policy and to make it work as needed. The decision to waive loans especially comes amid a concern for such farmers to continue to remain afloat and to keep from losing their lands due to the economic and weather-related problems in the region.
Support For Many Farmers
The farmers who are being supported by this move include many who have been looking for help in recent time:
- The farmers who will benefit from this have had loans of Rs. 62,000 crore in total that they are unable to pay off. This is due to a lack of revenues on their general ends.
- Many farmers have lost money due to natural disasters around the state. This has kept them from being able to sell the crops that they want to sell in order to make money.
- The small and marginal status of the farmers means that they are more susceptible to financial troubles. As a result, the waiver for the loans will be key to helping them stay afloat and to be more functional.
The totals owed within the state have been relatively high. Still, by working with support for many of these farmers, it will be easier for them to receive the help that they require. The dramatic help is designed to be crucial to allowing the state’s economy to continue to operate without any problems over a period of time.
Farmers in the state with NPAs or non-performing assets will receive support through the new plan. About 7 lakh farmers in the state had loans that eventually became non-performing assets. The outstanding expenses of about Rs. 5,600 crore relating to those assets will be written off in this plan. This is to assist in giving the plan a better sense of control where the risks involved will be minimalized.
Such NPAs had been used by many farmers as ones that had allowed for farming functions to be supported. However, NPAs have grown over time to where they are not worth as much money as what many people have typically gotten over the years. This comes amid real concerns over how well money talks.
What About the Rest of the Country?
Although UP will be getting this waiver, the central government is not expected to go forth with a larger waiver plan for more farmers around the entire country. The waiver plans will continue to work on a state-by-state basis. This is especially important as many states might not have the fiscal support needed to handle such waiver programs.
A few states are going forward with their waiver intentions. The Punjab government in particular is going forward with a similar plan although that state has been dealing with some financial struggles. The benefit of the scheme is being reviewed first and foremost to get a clear idea of what advantages can take place versus the costs associated with going forward with certain schemes.
The last time the national government had a waiver to use throughout the entire country was in 2008. This was when the UPA government established a scheme for 50 million farmers in 2008. This cost Rs. 65,000 crore at the time and was for many around the country regardless of state.
Other Campaign Plans?
The UP government is hoping that by offering this waiver to farmers, it can result in plans to get other campaign promises to be met. These include promises relating to getting electricity out to rural areas. Ordinances on how slaughterhouses may be organized are also expected to be considered. Additional plans are expected to be reviewed during initial meetings although it is unclear as to what might happen over time.
Strong efforts are being made by the government to help people in many ways. It especially comes amid a strong sense of consideration for managing the economic issues in the state. These include problems that are often held by the farmers within the state. By offering different solutions for managing such issues, it might be easier for the state to grow and to stay economically competitive with others.
The move by the UP government to help farmers who have been bearing with difficult times is being designed to help improve upon how farmers can pay off loans. The potential for this plan to spread into other states is substantial although time will tell as to how well the plan will work in many regions.