Mumbai: The Maharashtra government’s proposed farm loan waiver, slated for implementation by June 30 next year, is expected to cost the state exchequer over ₹25,000 crore, according to officials from the cooperation and finance departments. Two previous waivers, announced in 2017 and 2019 by successive state governments, had cost ₹18,762 crore and ₹20,497 crore, respectively.
Officials estimate that the financial burden this time could surpass ₹25,000 crore if the scope is expanded. “The cap per farmer in the first two loan waivers was up to ₹1.5 lakh crore and ₹2 lakh crore, respectively. If the government decides to increase the cut-off amount and the incentive to farmers who have been paying regularly, the total burden may increase,” said an official from the cooperation department. “Farmer leaders have also demanded inclusion of other agricultural loans, apart from the crop loans. If the demand is accepted, the burden will increase further.”
The official added that around 4.4 million farmers benefited from the previous waivers, and the number may now slightly increase. “The state government’s promise of implementing the waiver from June 30 next year will pose another challenge. The farmers may not repay their outstanding loans even if they are in a position to do so, to take benefit of the waiver. The outstanding of the crop loan has mounted to over ₹35,000 crore after political parties promised the waiver during the elections last year,” the official said.
Chief minister Devendra Fadnavis, after meeting with farmer leaders including Bachchu Kadu and Raju Shetti on Thursday, promised a decision on the loan waiver by June 30, 2026. The Bharatiya Janata Party (BJP) and its allies in the Mahayuti coalition had included a loan waiver in their election manifestos last year. Almost a year after forming the government, the Mahayuti has been dilly-dallying on its promise amid mounting fiscal strain.
“The announcement to take a decision by June 30 has come under pressure from the Opposition and farmers as the polls to over 700 urban and local bodies are round the corner,” said an official from the state finance department. “Although the state government has bought eight more months, the additional burden is not expected to be bearable even then. The estimated tax revenue in FY 2025-26 is ₹4.77 lakh crore, and the revenue deficit is estimated to be ₹45,891 crore. The burden of the new waiver would be over 6% of the tax revenue collection and lead only to revenue deficit and borrowing.”
The state’s finances are already stretched by flagship welfare schemes announced before last year’s assembly elections. The Ladki Bahin scheme, which has 22.5 million beneficiaries, has an annual cost of ₹33,750 crore, prompting the state government to divert funds from other departments and hold back funds meant for other schemes.
In addition, a ₹31,628 crore package announced for crop loss compensation following erratic monsoons this year will further increase fiscal pressure, according to officials from the finance department. “We expect at least ₹25,000 crore to be utilised from the package, and it will be an additional burden, putting more stress on the cash-strapped exchequer,” said the official quoted earlier.
Following Thursday’s meeting, Fadnavis acknowledged the state’s financial stress. “The burden of the loan waiver will definitely be high, but we will find a way out. We have given the largest compensation package of ₹31,628 crore for the farmers despite the financial stress,” he said.
The Mahayuti government announced the loan waiver after three days of massive protests by farmers in Nagpur. Thousands of farmers blocked the Nagpur-Hyderabad highway, demanding a complete loan waiver, guaranteed minimum support price (MSP) and compensation for crop losses caused by unseasonal rain.