Mumbai: In a major step, the Maharashtra government has decided to write off loans of over ₹964 crore taken by farmers from land development banks (LDBs) in the state. The move has come as a big relief for over 34,000 farmers who had taken loans from these banks over two decades ago, mortgaging their land as collateral.
The state has also approved the payment of another ₹275.40 crore to employees of LDBs for the Voluntary Retirement Scheme (VRS) and other dues. The decisions were taken in the state cabinet meeting on Thursday.
Both the moves are part of the Maharashtra government’s decision in 2015 to shut down all the 29 land development banks and acquire their properties. This was also part of the state budget 2022-23 passed in March this year.
The LDBs have been non-functional since 2001 and their non-performing assets (NPAs) had gone up beyond recovery, said officials from the state cooperation department.
“The state cabinet has decided to waive farmers’ loans of over ₹964.15 crore. As many as 34,788 farmers will benefit from the move and 1,70,502 acres of farmland will be freed from mortgage,” said Anoop Kumar, additional chief secretary of the cooperation department. “The 7/12 extract (property card) of these lands will be cleared.” In essence this means that farmers will be able to sell their lands or take fresh loans against them if required.
In return, the state government will get around 40 LDB properties worth ₹515 crore. “The evaluation of these properties was conducted back in 2015, and their value today would be even more,” Kumar told Hindustan Times.
In 2015, the Devendra Fadnavis government had decided to shut down all defunct LDBs owing to their high NPA. They had lost their relevance, as both national and private banks were aggressively expanding their networks. Both Nabard and the Reserve Bank of India (RBI) had recommended winding up the banks’ operations.
The Fadnavis government rolled out a one-time settlement (OTS) scheme to encourage loan defaulters and also tried to auction the LDB properties to recover the losses but were unable to achieve the desired results, said an official from the cooperation department.
On Thursday, the state government transferred ₹2,500 crore to the bank accounts of 6.90 lakh farmers who had repaid their loans regularly. While declaring the loan waiver scheme, the state government had declared that it would give an incentive of ₹50,000 per head to all such farmers.
