Indore: At the Sanyogitaganj anaj mandi (food grains market) in Indore, Bharat Singh Tanwar sits with his legs folded atop sacks of wheat he has just sold. He is happy with the price his produce has fetched today – Rs 2,300 per quintal, almost 20% higher than the minimum support price (MSP) of Rs 1,925 per quintal.
“I hope this price is maintained through the season,” he says. “It will help me pay off my loans from this year and the year before, which I did not repay because the Congress promised to waive loans. But that has not happened.”
In December 2018, soon after taking oath as chief minister of Madhya Pradesh, Kamal Nath sanctioned the proposal to waive farm loans upto Rs 2 lakh. He was fulfilling, on paper, the Congress’s promise of waiving farm loans if voted to power in the state.
Rahul Gandhi, president of the Congress party at the time, tweeted triumphantly declaring that his party had fulfilled its promise of waiving farm loans in 10 days.
However, 14 months later, benefits of the farm loan waiver have not reached all intended beneficiaries in the state. In fact, so far, the state government of Madhya Pradesh has only budgeted 35% of the total amount sanctioned, according to a Reserve Bank of India report released last year.
Nath had announced that loans totalling Rs 36,500 crore would be waived off. But in the budgets so far, the Congress government has only allocated Rs 13,000 crore. Even less has been spent.
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The MP state government decided to implement the loan waiver in phases. In the first phase, it said it will waive loans of those farmers whose total outstanding is upto Rs 50,000. The second phase will waive loans between Rs 50,000 and Rs 1,00,000, and the third phase loans between Rs 1,00,000 and Rs 2,00,000.
So far, the state government has said that it has waived loans up to Rs 50,000 of 21 lakh farmers in the first phase. If the claim is correct and the benefit has reached each of the 21 lakh farmers, then MP has waived loans totalling a maximum of Rs 10,500 crore (if Rs 50,000 has been waived of all 21 lakh farmers).
The second phase of implementation of the loan waiver is ongoing and the third phase is yet to be implemented.
Sanyogitaganj anaj mandi in Indore. Photo: Kabir Agarwal
However, several farmers The Wire met have claimed that even though their loans should have been waived in the first phase, they have not received the loan waiver certificate.
For instance, Tanwar had pending dues of Rs 40,000 on his Kisan Credit Card (KCC) at the time the loan waiver was announced. Expecting that his loan will be waived off, he did not repay on time.
“But because my loan has not been waived, I have been charged a penalty on interest,” he said.
Since Tanwar defaulted on repayment, he has to pay interest at 7% instead of 4% which is the subsidised rate of interest if the loan is repaid on time.
Govind Rathore, who is from Dhar – about 60 km from Indore – also has a similar story. His loan of Rs 1,10,000 has not yet been waived. He too has defaulted on payment, expecting a waiver since the Congress had promised that loans up to Rs 2 lakh will be waived within 10 days.
“I don’t know how to repay the loan because I had planned my crop and expenses expecting the loan to be waived. But that has not happened and now I have to repay the loan plus the penalty [the higher rate of interest],” Rathore said.
Govind Rathore. Photo: Kabir Agarwal
The failure of the Congress government in MP to fulfil its pre-election promise has stirred some discontent within the party as well. Recently, senior party leader Jyotiraditya Scindia hinted that he might be forced to hit the streets against his own party if the loan waiver promise is not fulfilled.
“It is impossible that the Congress party makes a promise and does not fulfil it. If Congress has promised something then it is very important to fulfil it…nahi to sadak par utarna padega,” he said.
In response, Nath seemed to egg him on. “Let him do it,” he said.
Farmers in Madhya Pradesh are not impressed by the squabble. “Are they in power or is someone else? They are supposed to do a job and not try to grab headlines by giving statements against each other,” said Naresh Paliwal, a farmer from Potlode.
“They have also not provided a rupee of the wheat bonus that they had promised,” Paliwal added. In March 2019, the Nath-led Congress government in MP announced that it will provide farmers a bonus of Rs 160 per quintal above the minimum support price for wheat.
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Paliwal has not been paid his dues in full for the wheat he had sold last year in the rabi marketing season. “I am still to receive Rs 49,000 from last year,” he said.
While he has received the price for the wheat, he hasn’t been paid the amount of bonus due.
“But farmers have not received a single rupee of the bonus that was due,” said Arpit Rathore, a farmer from Dhar who had sold 430 quintals of wheat last year but has not received the bonus amounts totalling Rs 68,800. The story is the same for all farmers who had sold wheat in the state last year.
A wheat farm near Indore. Photo: Kabir Agarwal
In December 2019, the non-payment of the bonus on wheat had led to uproar in the MP Vidhan Sabha, as the Bhartiya Janata Party took the government to task on its failure to deliver on its promise.
Nath argued that the bonus has not been paid as the Centre has refused to pay for seven lakh metric tonnes out of the 73 lakh metric tonnes of wheat that had been procured in the state last year, leaving the state with the prospect of an additional bill of Rs 1,400 crore which it had not budgeted for.
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But it’s not clear why the Centre’s decision to not pay for seven lakh metric tonnes of wheat would impact the state’s ability to pay the amount of bonus, as the state had promised and even budgeted last year.
“These are just excuses. The reality is that the Congress has made big promises without having any idea how to implement them,” said Paliwal.