Maharashtra farm loan waiver: Prithviraj Chavan writes to Urjit Patel, seeks inquiry into lapses by banks

As Maharashtra's farm loan waiver increasingly comes under Opposition criticism and media scrutiny, former Maharashtra chief minister Prithviraj Chavan has written to Reserve Bank of India (RBI) Governor Urjit Patel seeking an inquiry into the issue.

In his letter, Chavan referred to an article on Firstpost which pointed out that the number of loan accounts reported by public sector banks to the state government was initially exaggerated by about 9.10 lakhs. He also referred to an article in The Indian Express which said that the Union Bank of India initially gave an estimate of 6.48 lakh defaulting farmers, which was later brought down to 1.34 lakhs by the state government.

"As a result, the loan disbursement process in the state has collapsed, leaving millions of farmers in (the) lurch," the letter, which was sent on 29 November, states.

Prithviraj Chavan has lashed out at the role of the banks which resulted in mismanagement of the scheme. "The implementation of the (farm loan waiver) scheme has hit a serious roadblock as the banks, both the public sector and co-operative, were found to have inflated the number of farm loan accounts by about 14 lakhs," he wrote. However, he has also stated that there could be a 'problem in the state government's online application process and not in the bank data.'

 Maharashtra farm loan waiver: Prithviraj Chavan writes to Urjit Patel, seeks inquiry into lapses by banks

The letter sent by Prithviraj Chavan to RBI Governor Urjit Patel. Sanjay Sawant/Firstpost

In June this year, the State Level Bankers Committee announced that Rs 34,022 crore was sanctioned to be deposited in 89 lakh beneficiary accounts. However, the number dropped sharply to 77.29 lakh accounts owing to stringent screening methods removing the scope of ghost accounts and multiple beneficiaries from the same family.

In an interview to Firstpost on 25 November, Chavan alleged that Maharashtra chief minister Devendra Fadnavis is using the loan waiver as a 'publicity tool.' He said that the government must either file a criminal case against the banks, or the chief minister should 'reveal the truth about the mess.'

Chavan further stated that the requirement of Aadhaar cards, and the complexity of the application form— with 66 sections to be filled— affected the rollout of the scheme.

As this report points out, the state government initially received 1.05 crore applications from farmers. The banks furnished a list of 77.29 lakh who, according to their records, were eligible for the waiver. But a combined master list by Innowave— the government's IT vendor— had only 2.39 lakh valid applicants.

Mismatches in Aadhaar numbers, incorrect names and loan amounts have led to delays in the disbursement of the loan waiver. As a result of the technical glitches, very few farmers have actually received the benefit of the scheme as yet. With the winter session of the Legislative Assembly to begin on 11 December in Nagpur, the Devendra Fadnavis-led government is expected to be at the receiving end of severe criticism, as Opposition parties have been lashing out at it over the scheme.

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Updated Date: Dec 01, 2017 16:30:42 IST