the The Devendra Fadnavis-led Mahayoti government on Tuesday approved a farm loan waiver scheme to write off crop loans of up to $200,000 and provide a $50,000 incentive for farmers who have repaid their loans, the Maharashtra Chief Minister’s Office said in a state cabinet meeting.
The scheme, ‘Punyashlok Ahilyadevi Holkar Shetkari Karjmukti Yojana 2026’, will benefit 5.6 million farmers and cost the exchequer $Rs 36,585 crore, the government said.
Chief Minister Devendra Fadnavis, who also holds the finance portfolio, first announced the loan waiver for farmers on March 6 when he presented the Maharashtra budget in the state Assembly.
According to the CMO’s statement, the scheme consists of three components: loan waiver, one-time settlement and incentive. Farmers who have taken loans from nationalized banks, rural banks, private banks, cooperative banks and cooperative credit societies will be eligible. It will apply to eligible farmers regardless of the size of their land.
Under the waiver component, farmers with total short-term crop loans outstanding, including principal and interest, are up to $2 lakh will be eligible for complete debt relief provided the loans are disbursed between April 1, 2019 and March 31, 2025, remain overdue as of September 30, 2025, and unpaid till March 31, 2026.
Farmers who exceed their dues $2 lakh will be covered under the OTS component. In such cases, borrowers must first liquidate the above amount $2 lakh by March 31, 2027, to become eligible for $2 lakh waiver.
Under the incentive component, farmers who repay crop loans on time in at least two of the three fiscal years from 2022 to 2023 will receive an incentive grant of up to $50,000.
Political party employees, government employees, income taxpayers, officers and employees of cooperative enterprises who receive salaries exceeding $25,000 per month were excluded from the scheme.
The last farm loan waiver in Maharashtra was implemented in 2020 by the erstwhile Maha Vikas Aghadi (MVA) coalition led by Uddhav Thackeray, which cleared outstanding crop loans up to $2 lakh distributed between April 1, 2015 and March 31, 2019.
Officials said that since the state is currently under a model code of conduct for the upcoming Legislative Council elections on June 18, the government has sought prior approval from the Election Commission.
They said the EC allowed the announcement because the policy announcement had already been made in the budget speech.
