Yogi Adityanath keeps poll promise, waives off Rs 36,359 cr farm loan in first cabinet meeting as UP CM

In keeping with its poll promises, the Bharitya Janata Party-led Uttar Pradesh government on Tuesday, announced its much touted farm loan waiver, estimated to benefit over 2.15 lakh small and marginal farmers in the state.

The announcement was made after the first cabinet meeting of the new Uttar Pradesh government, held at Shastri Bhawan in Lucknow, a fortnight after the Yogi Adityanath took over as the chief minister.

Addressing the press after the meeting, UP Health Minister Siddharth Nath Singh made the announcement. He said that the cabinet has unanimously decided to waive off farm loans up to Rs One lakh for small and marginal farmers. The minister also mentioned that of the 2.30 lakh farmers in the state, roughly 92.5 percent farmers will fit the bill for the announced benefits. Moreover, the government has also decided a complete waiver of farm loans that had turned into Non performing Assets (NPA). This, he said would benefit more than seven lakh farmers and would cost the exchequer an additional Rs 5,630 crore. The loan waivers will cause an additional 36,359 crore burden on the state coffers.

In the past, farmers in the state had suffered because of successive drought and hailstorm.

The Yogi Adityanath cabinet decided to float Kisan Rahat Bonds for raising Rs 36,359 crore required for waiving off the loans as the Fiscal Responsibility and Budget Management (FRBM) Act mandates that no state can allow its fiscal deficit to grow beyond three per cent of its GDP.

Uttar Pradesh Chief Minister Yogi Adityanath. PTI

Uttar Pradesh Chief Minister Yogi Adityanath. PTI

This comes at a time when government sources said that around 2.30 crore farmers in the state have suffered losses due to natural calamities in the recent past and were unable to repay loans amounting to about Rs 62,000 crore. It is instructive to note here that the state is already reeling under a debt of  Rs 3,27,470 crore, the nation's second most indebted state, according to a RBI's state fiscal report up to 2016. The UP government, if at all plans to fulfill these announcements, it must dedicate a mammoth one-third chunk of the annual state budget to the cause.

They also said that it could be difficult to handle the burden of loan waiver in a single financial year and that was one of the reasons to put the cabinet meeting on hold till a way was found to honour the prime minister's poll promise that the BJP government would take a decision on farm loan waiver at its first cabinet meeting.

The BJP, in its manifesto, had promised to waive the loans of small and marginal farmers. Prime Minister Narendra Modi too had said in his campaign speeches that writing off farm loans would be among the foremost tasks of the BJP government in Uttar Pradesh.

Nine more key decisions were taken in the first cabinet meeting of the new government, which the minister said coincided with the pious occasion of Ram Navami.

Here are the key decisions that were announced by the UP government on Tuesday:

  1. The UP government announced special measures to extend relief to wheat farmers. The UP cabinet passed the proposal to open 5,000 new direct wheat purchase outlets — with an aim to procure nearly 80.25 tonne of the grain — to rein in the blooming business of middle men, who often don't let the benefit of minimum support price reach the farmers.
  2. The ministers said the cabinet also decided to raise by Rs 10 per quintal the minimum support price for wheat procurement as loading and unloading charges. The MSP for wheat it Rs 1,680 per quintal.
  3. The formation of a three-member committee was also announced to study how can the interest of potato farmers be accommodate and protected, who face immense hardship in case of bumper crops. The committee will also look at ways to ensure right price for the potato farmers, who the government said are currently forced to sell their produce at a loss.
  4. The cabinet also stamped its approval on the anti-romeo squad, while mentioning that concrete steps will be taken to ensure consenting young couples are not harassed for interacting in public spaces. UP Power Minister Shrikant Sharma said that the officers constituting the squad have been strictly warned that any undue harassment to the youth will invite punitive action from the government.
  5. The cabinet also approved the crackdown on illegal slaughterhouses in the state that has been one of the most talked about decisions of the Yogi government. Singh said that unlike the rumours being spread, the government has only shut 26 illegal abattoirs, while adding that they were not averse to granting approvals to new requests for licenses.
  6. The cabinet also gave its nod to building a sports complex in Ghazipur.
  7. A five member committee will be formed to formulate a new industrial development policy to invite investment into the state. It would also visit other states and study their industrial policies.
  8. In order to check illegal mining, the cabinet decided to constitute a group of ministers. The GoM headed by Maurya will give its report in a week.
  9. Farm loan waiver.

The decisions come a fortnight after Adityanath took over the reins of the state on March 19 after BJP and its allies stormed to power in the 403-member Assembly capturing 325 seats, an over three-fourth majority.

Although there is no constitutional compulsion of convening the first cabinet meeting within a certain period, traditionally the ruling party has held it within a week or so of forming the government. The Adityanath government was sworn-in on 19 March. There have been informal meetings of the state cabinet ministers but they were largely informal in nature.

With inputs from agencies


Published Date: Apr 04, 2017 08:35 pm | Updated Date: Apr 04, 2017 10:50 pm

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