Centre’s new loan waiver scheme aims to ease farmers’ debt burden, targeting small and marginal farmers with loans up to ₹2 lakh. Amid rising suicides and protests in Maharashtra, the initiative promises relief but faces criticism for delays and limited scope. Experts call for MSP reforms and broader support to address the agrarian crisis.
Farmers’ Debt Relief: New Loan Waiver Scheme Rolled Out
In a significant move to address the escalating agrarian crisis, the Central Government of India has announced a new farmers’ debt relief scheme, focusing on waiving loans for small and marginal farmers. The scheme, unveiled on July 3, 2025, targets farmers with outstanding loans up to ₹2 lakh, aiming to alleviate the financial strain felt by millions across the country, particularly in states like Maharashtra, where farmer distress has reached alarming levels.
The announcement comes in the wake of growing protests and opposition demands for immediate debt relief. In Maharashtra, opposition leaders, including Congress Legislature Party leader Vijay Wadettiwar, have criticized the state’s Mahayuti government for delaying promised loan waivers. Reports indicate that 767 farmers in Maharashtra died by suicide in just three months, underscoring the urgency of the crisis. The new scheme is expected to benefit approximately 90,000 farmers in regions like Kolhapur and Jamshedpur, with the Jharkhand government allocating ₹288.71 crore for a similar initiative.
Under the scheme, loans from nationalized and cooperative banks, as well as licensed moneylenders, will be eligible for waivers. Farmers with dues of ₹1 lakh will incur only 2% interest, while those with loans between ₹1-5 lakh will face a 5% interest rate, according to Nashik DCC bank administrator Santosh Bidwai. The government has also introduced incentives for farmers who repay loans regularly, though critics argue this may exclude those in dire need who have defaulted due to financial hardship.
However, the scheme has sparked mixed reactions. Congress leader Rahul Gandhi has accused the Central and Maharashtra governments of indifference, pointing out that while farmers struggle with rising costs of seeds, fertilizers, and diesel, loan waivers for wealthy industrialists are processed swiftly. “Farmers are sinking deeper into debt every day, but their demands for loan waivers and MSP guarantees are ignored,” Gandhi said in a recent X post. He highlighted the stark contrast between the government’s quick action on corporate loans and its hesitation to support farmers.
Opposition legislators in Maharashtra, including Jayant Patil and Bhaskar Jadhav, have slammed the government for forming committees instead of implementing immediate waivers. They argue that farmers are grappling with unseasonal rains, GST burdens, and production costs as high as ₹60,000 per crop, with no guarantee of fair prices. “Committees don’t wipe debt; political will does,” said Congress leader Balasaheb Thorat, emphasizing the need for comprehensive reforms beyond temporary waivers.
In Jharkhand, the state government’s parallel loan waiver scheme has been hailed as a step forward, but concerns remain about its reach. Union Minister G. Kishan Reddy recently criticized Telangana’s loan waiver program, claiming that one lakh farmers with loans below ₹1 lakh were excluded, highlighting gaps in implementation.
Experts suggest that while the new scheme offers temporary relief, long-term solutions like legal guarantees for Minimum Support Price (MSP), improved crop insurance, and better market access are critical to addressing the root causes of farmer distress. The rising cost of agricultural inputs and market volatility continue to push farmers toward moneylenders, exacerbating their debt cycle.
The government has promised to roll out the scheme in phases, with guidelines to ensure transparency and eligibility. However, with rural banks reporting difficulties in recovering short-term crop loans due to farmers’ anticipation of waivers, the implementation faces logistical challenges. The opposition’s call for a blanket waiver and immediate action reflects the growing frustration among farmers, who feel neglected despite their critical role in India’s economy.
Disclaimer: This article is based on recent news reports and statements from government officials, opposition leaders, and media sources, including Times of India, The Hindu, Economic Times, and Navbharat Times. Information is accurate as of July 4, 2025, and subject to change as new developments emerge.