t-gana-govt-faces-challenge-of-fulfilling-promises

The cash-strapped Congress government in Telangana is grappling with the twin challenges of fulfilling the promise of a farm loan waiver of up to Rs 2 lakh and increasing the financial support under the “Rythu Bharosa” scheme from Rs 10,000 per acre per annum to Rs 15,000.

 

It’s virtually a race against time for Chief Minister A Revanth Reddy to mobilise resources to honour the loan waiver promise by August 15.  After coming to power in the December 2023 assembly polls, the Congress government finds itself in a tight financial situation with no marked improvement in revenue generation.

 

As per preliminary estimates, there are at least 47 lakh farmers in the state who have taken farm loans, and most have loans less than Rs 1 lakh. The government needs at least Rs 35,000 crore by August 15, the deadline set by the Chief Minister to waive off farm loans.

 

According to official sources, the government is considering several options to reduce the burden, such as using data from the Prime Minister Kisan Scheme as a baseline to determine eligibility for farm loan waiver. 

 

According to the scheme, there are approximately 33 lakh eligible beneficiaries. If the beneficiaries are selected under the PM Kisan Scheme, the government would need only Rs 25,000 crore. This would exclude state and central government staff, income tax assessee, and public representatives.

 

The government has already indicated that steps would be taken to exempt Ministers, MLAs, MLCs, Mayors, ZP chairpersons and people holding other constitutional posts from the crop loan waiver benefit. 

 

Employees of the State and Central governments, retired employees drawing pensions over Rs10,000 a month, those paying Income Tax, doctors, engineers, chartered accountants, architects and other professionals too are likely to be exempted.

 

There is a proposal to set up a special farmers’ welfare and development corporation that would take over all the crop loans from the banks and repay them in instalments over 48 months.

 

This will make farmers debt-free at one go unlike crop loan waiver schemes implemented twice by the previous Bharat Rashtra Samithi (BRS) government. In the past,  the banks had imposed an interest burden on farmers due to delays in the release of funds by the government.

 

To avoid this, the present government plans to take over the farm loans through the proposed corporation and repay amounts to banks in instalments.  

 

Similarly, the promised rise in ‘Rythu Bharosa’ support will entail an additional burden on the exchequer. The previous BRS government had earmarked over Rs15,000 crore to be paid to 68 lakh farmers at Rs10,000 per acre per year in two equal instalments.

 

In the run-up to the assembly polls, the Congress had promised to increase the amount to Rs 15,000. The government is now scrambling for resources to credit the amounts into farmers’ bank accounts as the Kharif crop season has already commenced.

 

Pressure is also mounting on the government to implement other key guarantees, such as a Rs 4,000 monthly pension for women, which will have a significant fiscal impact on the government.