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Veteran Congress leader Kamal Nath has waived off farm loans as soon as he was administered oath as Madhya Pradesh chief minister on December 17. He approved writing off loans for farmers who had borrowed up to Rs 2 lakh.
Congress President Rahul Gandhi had announced that the party would start the process of writing off farmer loans within 10 days of government formation in the state. Soon after Kamal Nath approved the farm loan waiver, Gandhi tweeted:
The Congress formed the government in MP after winning 114 seats, two short of the half-way mark in the 230-member Assembly. Akhilesh Yadav-led Samajwadi Party and Mayawati-led Bahujan Samaj Party, which had won one and two seats respectively, had agreed to support the Congress in the state.
In an interview to CNN-News 18, Kamal Nath had said that reviving the state's economy and stimulating the agriculture sector would be his priority once he assumed the role of chief minister.
He said, "There are challenges with the finances of the state. The state is bankrupt and we have to find out how we can tighten our belt and cost-cutting measures we need to undertake."
Also read | Waiver conundrum: Congress, BJP in race to write off loans, but experts advise against it
About 70 percent of Madhya Pradesh's population depends directly or indirectly on agriculture. The farm loan waiver is expected to cost the state's treasury about Rs 160 billion.
According to experts, waiving off farm loans is not the most viable solution to the agrarian distress which is rampant across India, and that an income support system would be a better alternative.
However, Kamal Nath had reiterated that he would stick by his decision. He had said, "If the banks can waive off, can take a haircut, can waive off 50% of the loans to business houses, why can't it be done for farmers?"
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