Maha cabinet nod for ₹36,500-cr farm loan waiver; 5.6 million farmers to benefit

THe Devendra Fadnavis-led Mahayuti authorities on tues sanctioned a farm loan waiver connive to compose off crop loans of up to ₹200,000 and provide a ₹50,000 incentive to farmers who have been repaying their loans, the Maharashtra chief minister’s office said a meeting of the state cabinet.The scheme, "Punyashlok Ahilyadevi Holkar Shetkari Karjmukti Yojana 2026", would benefit 5.6 million farmers and cost the exchequer ₹36,585 crore, the government said.Chief minister Devendra Fadnavis, who also holds the finance portfolio, first announced a loan waiver for farmers on March 6 when he presented Maharashtra’s budget in the state assembly.According to the CMO statement, the scheme consists of three components: a loan waiver, a one-time settlement, and an incentive. Farmers who secured loans from nationalised banks, rural banks, private banks, cooperative banks, and cooperative credit societies will be eligible. It will apply to eligible farmers irrespective of the size of their landholding.Under the waiver component, farmers with a total outstanding short-term crop loans, including principal and interest, of up to ₹2 lakh would be eligible for complete debt relief provided the loans were disbursed between April 1, 2019, and March 31, 2025, and remained overdue as of September 30, 2025, and unpaid till March 31, 2026.Farmers whose dues exceed ₹2 lakh will be covered under the OTS component. In such cases, borrowers must first clear the amount above ₹2 lakh by March 31, 2027, to become eligible for the ₹2 lakh waiver.Under the incentive component, farmers who have repaid crop loans on time in at least two of the three financial years from 2022-23 would receive an incentive grant of up to ₹50,000.Office-bearers of political parties, government employees, income-taxpayers, and officers and employees of cooperative institutions drawing salaries exceeding ₹25,000 per month have been excluded from the scheme.Maharashtra’s last farm loan waiver was implemented in 2020 by the previous Uddhav Thackeray-led Maha Vikas Aghadi (MVA) coalition, which cleared outstanding crop loans up to ₹2 lakh distributed between April 1, 2015, and March 31, 2019.Since the state is currently under the Model Code of Conduct for the upcoming legislative council elections on June 18, the government sought prior clearance from the Election Commission, said officials.They said EC permitted the announcement since the policy announcement had already been made in the budget speech.