Yogi Adityanath’s Rs 36,359 cr farmer loan waiver

Yogi Adityanath and his party, the BJP, have indeed scored a big political point by announcing a Rs 36,359 crore farm loan waiver at its first cabinet meeting on Tuesday, but at the cost of good economics that’ll have lasting consequences both on both the farmer and banking sector.

This is how the package looks like. A total of Rs 36,359-crore of loans will be waived for 2.15 crore farmers in the state. Of this, Rs 30,729 crore is loans of up to Rs 1 lakh and Rs 5,630 crore is write off of loans that are already bad or non-performing assets (NPAs), in banking parlance. Loan waiver is a promise made by the party’s star campaigner, Prime Minister Narendra Modi, during his poll campaign in the agrarian state that is also India’s most populous state.