After pledging to waive farmers’ loans in Madhya Pradesh within 10 days of forming its government, the time is coming for the  Congress to fulfil its promise—one which is cited by many as the gamechanger during the recently-held assembly elections in the state. The Congress defeated the 15-year-old Bharatiya Janata Party government in a nail-biting battle. Kamal Nath will be sworn in as chief minister today.

While the Congress didn’t specify a number in the manifesto—it simply said it would waive farmer loans—sources say the party will waive those loans taken by farmers from 2007 to 2018. The promise to do so within 10 days of the government being formed was reiterated by Rahul Gandhi during his rally in Mandsaur, who also vowed the chief minister would be changed if this did not happen.

Four days ago, the Congress began collecting the data of farm loans from cooperative and nationalised banks. Talking to Newslaundry, Basant Pratap Singh, chief secretary, Madhya Pradesh, says, “We started collecting data from cooperative and nationalised banks and CM-designate Kamal Nath is going to make an announcement regarding the waiving of farmers loans on Monday during the oath-taking ceremony.”

Bureaucrats chose to remain tight-lipped about the total amount to be waived by the new government, saying the figures would be revealed by the new CM once he took oath. However, as per data of the State Level Bankers Committee, the total outstanding amount of crop loans in agriculture is ₹75,823 crore as of March 31, 2018.

KC Gupta, principal secretary of the Department of Cooperation, Madhya Pradesh, says, “As per the figures of cooperatives banks, for the outstanding amount till March 31, 2018, 33 lakh farmers have been given loans amounting to about ₹15,000 crores. Sixty per cent of these farmers are small-marginal farmers who have a land area of less than two hectares. This is the data of only cooperative banks; nationalised banks’ data is not available with us.”

A team comprising bureaucrats also visited Punjab and Maharashtra in order to understand the loan waivers declared by governments there last year. Additionally, a four-member team from the Madhya Pradesh Agency for Promotion of Information Technology will also travel to Chandigarh today to understand the software and portal developed by the Punjab government in connection with loan waivers. A letter dated December 14 in this regard was issued by Rajesh Rajora, principal secretary, Department of Agriculture, government of Madhya Pradesh.The letter stated: “The Government of Madhya Pradesh is starting the procedure of farm loan waiver as soon as possible and within the next 15 days, software will be developed in order to operationalise the portal. On this portal, the database of 50 lakh farmers will be uploaded on by acquiring it from thousands of banks.”

It is significant to note that Madhya Pradesh already holds a debt of over ₹1.60 lakh crore (₹1,60,871 crore). Activists say the farmers’ loans which they’ve promised to waive will come up to about ₹50,000 crore.  

Sardara Singh Johl, agriculture economist and former director of the central board of governors of the Reserve Bank of India based in Punjab, says, “In the similar manner [to the Congress in MP], Punjab CM Amarinder Singh promised to waive the loan of farmers within a period of 15 days after the formation of his government last year, but still nothing has happened. The Punjab government was already in debt of ₹2.5 lakh crore and they promised to waive the farmers’ loans, which was up to ₹87,000 crore.” Johl says Punjab’s government is now waiving the loans in intervals up to the amounts of ₹100-150 crore but this has led to problems like irregular salaries and pensions in the government sector.

“Similarly, MP is also under debt and they have promised to waive the loans of thousands of crores, how can they do so?” Johl asks. “There is no chance that banks will waive the loan. Such kind of promises are wrong and false in nature. Because of such promises, it becomes difficult for farmers to acquire loans in future. It spoils the credit culture and people just wait for the government to waive their loans. Farmers, everybody comes in distress. The Election Commission should bring in restrictions on this kind of loan-waiving promises.”

Johl says he has a few questions for political parties that make these sort of elections promises to “score political mileage”. “What is the fault of those farmers who have not taken loans? What is the fault of those farmers who have repaired their loans? Why should farmers who can repay loans not do so? Is the loan sanctioned to an individual or the whole sector?”

Johl suggests the government form a panel for those farmers who are really in distress. “They should cut down their loan interest, or rewrite their loans, or waive off their loans. Political parties should remember this money belongs to taxpayers and is not the personal pocket of the government. If loans are waived in such huge amounts, the country will become bankrupt.”

Vinayak Parihar, a farmers’ rights activist and expert, says the government will need to waive farmer loans of at least ₹50,000 crore. “As a farmer, I think that it’s practically possible and it should happen, as farmers are dying in Madhya Pradesh. I know governments don’t have answers to the question on how it’s possible but there are a number of ways through which they can do it. I am not an economist but as a farmer, I feel this is possible.”

Parihar also says the new Congress government will need to fulfil this promise before the 2019 elections or it will be destabilised. “They won this election just on the basis of this promise of waiving loans. Around one per cent of the vote share shifted toward them; otherwise, there was no chance they could have won this election. The BJP is just a few seats less than them and can destabilise them anytime. Now it has become a compulsion for the Congress to waive the loans. I hope this is not just an election promise.”

Bhopal-based activist Ajay Patidar points to the numbers. There are 85 lakh small-marginal farmers in MP, he says, out of which 50 lakh farmers are in debt to the tune of ₹60,000 crore. “In the last 14 years, farmer loans have increased from 10 per cent to 15 per cent. A farmer with a loan of ₹1 lakh 13 years ago now has a loan of ₹12 lakh. Farmers without loans now have loans of ₹7 lakh. According to the government of India’s financial survey in MP, farmers are not getting appropriate minimum support price for their crops. Farming has become a professional loss for them and they are not able to repay their loans.”