Rs 30K Crore Maharashtra Farmers’ Loan Waiver Still Unpaid; Banks Hired Students To Enter Data, Risking Breach

In June of this year, farmers’ protests in Maharashtra started from Ahmednagar and quickly amalgamated in strikes and bandhs which saw lakhs of litres of milk spilled on road by angry farmers and threats of stopping supplies to urban markets. The state responded by announcing a loan waiver scheme for about 70 lakh farmers at a cost of Rs 34000 crore to the exchequer. But even after 6 months it has barely been implemented and is mired by controversy and mismanagement, with government and banks blaming each other.

Recently, over 100 state legislators, cutting across party lines, came together to enquire into the implementation status of Chhatrapati Shivaji Maharaj Shetkari Sanman Yojna (CSMSSY) – the scheme which was announced in June and is seen as a pet project of BJP CM Fadnavis aims to provide loan waiver up to Rs 1.5 lakh to farmers irrespective of size of landholding. Also, farmers who regularly repaid loans are being considered for an incentive of Rs 25,000.

The Implementation Caveats

Almost any government scheme can be said to be suffering from the problems of inclusion and exclusion errors, lack of accountability, and delays. The farmers’ demands include loan waivers, remunerative prices for their produce and quick implementation of Swaminathan committee recommendation which the BJP government had made a part of its election manifesto in the state in 2014. After 3 years of government, the state lending banks are short of funds citing demonetization as a reason; the farmer cooperatives are controlled by vested interests and the spree of farmer suicides is unabated.

As of now, only about Rs. 4,000 crore has been released by the government as the rest is conflated by duplicate Aadhaar entries, cases of people getting waivers without applying (including a Shiv Sena MP), multiple loan entries even where farmers have repaid loans, and host of related issues.

As reported in The Indian Express, Principal Secretary, Department of Information and Technology, V K Gautam said, “The total applications received from farmers across Maharashtra are 77.29 lakh…” Adopting advanced technology and software, each and every application is being validated to ascertain eligibility, he said, and added that the process involved corroborating data received from multiple banks with individual applicants, which was a mammoth task.

In a series of articles, Firstpost has been highlighting the inefficient and potentially high risk-practices being employed by banks and government such as using college students to work day and night to manually enter data in the 66 column list of lakhs of beneficiaries without even signing non-disclosure agreements.

The Blame Game

Secretary Gautam has already proceeded on leave for 15 days due to ‘personal reasons.’ The banks say that government software was so rigid that if failed to proceed if an Aadhaar number was not entered, As not all farmers have Aadhaar numbers, banks had no choice but to enter dummy numbers as placeholders.

According to The Indian Express, of the 56.59 lakh applications from 77.27 lakh farmers for the farmer loan waiver scheme, only 15 lakh accounts have been found eligible for further processing as a leading national bank’s list to the government includes 253 farmers’ names with the identical Aadhaar number 100000000000. More than 50 farmers apparently have the Aadhaar number 11111111111.

The government in typical flailing manner blamed the banks for sending incomplete data and even hinted at a corruption nexus. The NCP-Congress led opposition has been circling the government for quite some time now but it is to be noted that farm loan waivers in 2008 under their government was found to be similarly beset with problems by CAG.

The state itself is facing a cash crunch as noted by The Hindu, “for 2017-18, the estimated revenue deficit is likely to cross ₹4,000 crore. Excise revenue has dropped by ₹7,000 crore after the Supreme Court’s decision to ban liquor outlets near highways. Implementing the Seventh Pay Commission report for State government employees will cost ₹21,000 crore. Ambitious infrastructure projects — the Mumbai-Nagpur superhighway (₹40,000 crore), urban Metro projects (over ₹1 lakh crore) “

Add to this the Rs 34,000 crore bill for loan waivers and Rs 3,800 crore for the Shivaji statue, Maharashtra is looking at hard times ahead.

Shoddy Implementation of a Stop-Gap Solution

Every major policy body in India including RBI and CAG has noted that loan waiver is a temporary symptomatic solution at best. It decreases the state capacity for investment, ruins the fiscal discipline in the area and forces banks to move to lucrative regions. In light of this, the genuine concerns of farmers when barely met even after loan waiver schemes with such disdain and apathy that it forces us to shudder and take a look at the disintegrating backbone of the nation.

Author – Abhinav Joshi