The Maharashtra Cabinet on Tuesday, June 2, approved the Rs.36,585 crore Punyashlok Ahilyadevi Holkar farm loan waiver scheme, expected to cover 55.72 lakh farmers across the State. The scheme covers short-term crop loans taken between April 1, 2019, and March 31, 2025, and has three components: a debt waiver, a one-time settlement, and incentive benefits for regular borrowers. The Mahayuti government, led by the BJP, has called the scheme “historic”; the opposition says it cheats farmers in the name of relief. The scheme also lands at a moment when the State’s finances are under acute stress.

Under the debt waiver component, farmers with outstanding crop loans—principal and interest combined—up to Rs.2 lakh that remained overdue on September 30, 2025, and unpaid by March 31, 2026, are eligible for complete relief. There is no landholding limit, and the waiver applies across one or more loan accounts per farmer.

Farmers whose crop loan liabilities exceed Rs.2 lakh are covered under the one-time settlement component. They must repay the amount exceeding Rs.2 lakh; the State will then waive the balance up to Rs.2 lakh. Restructured crop loans are also covered. Eligible farmers under this component have until March 31, 2027, to deposit the balance amount.

The third component is an incentive for regular borrowers. Farmers who have consistently serviced their loans will receive Rs.50,000—but only after they have repaid any dues above Rs.50,000 by March 31, 2027. Farmers who benefited from the 2019 Mahatma Jyotirao Phule loan waiver scheme but subsequently fell into debt are also eligible for the Rs.50,000 incentive. To qualify, farmers must have availed crop loans between 2022-23 and 2024-25 and repaid them within the stipulated time.

The scheme excludes salaried individuals earning more than Rs.25,000 a month, income taxpayers, government employees, current and former elected representatives, and retired individuals drawing a pension above Rs.25,000 a month.

Opposition parties and farmers’ organisations have strongly objected to the scheme’s criteria. Congress State president Harshwardhan Sapkal said more than 50 per cent of the State’s farmers would be shut out. “Farmers who have taken a loan before 2019 won’t get any benefits from it. Farmers also take loans for buying animals like cows and bullocks, and for tractors and machinery. They won’t get the benefit of loan waivers. We demand that all agriculture-related loans be waived off,” he said.

All India Kisan Sabha leader Dr Ajit Navale pointed to another gap. “Farmers who work in cooperative organisations such as sugar mills and dairies are excluded. This is an injustice for them. In 2019, 31.29 lakh farmers received benefits from a loan waiver scheme. Now they will get only Rs.50,000. Their new loans should have been waived off instead. Although the government claims 56 lakh farmers will benefit, not even half will be eligible under these criteria,” he said.

Swabhimani Shetkari Sanghatana leader and former Member of Parliament Raju Shetti flagged exclusions for farmers using modern inputs. “Farmers with greenhouses, floriculture, and horticulture will get nothing out of it. Farmers with loans of Rs.5 lakh and above won’t benefit without restructuring their loans for three to five years. The government should have considered all these situations before announcing a half-baked scheme,” he said.

A recurring fix

This is the fifth farm loan waiver in Maharashtra since 1980, when Chief Minister A.R. Antulay announced the scheme that came to be known as the Khawati loan waiver. The next came in 2008, when the United Progressive Alliance (UPA) government announced an Rs.80,000 crore national farm debt waiver. In 2017-18, the BJP government under Devendra Fadnavis announced the Rs.34,022 crore Chhatrapati Shivaji Maharaj Shetkari Sanman Yojana. In 2019-20, the MVA government led by Uddhav Thackeray announced the Mahatma Jyotirao Phule Shetkari Karjmukti Yojana with an initial outlay of around Rs.22,000 crore. The 2026 Punyashlok Ahilyadevi Holkar scheme is the fifth overall—and the fourth within barely 20 years.

The scheme arrives as the State’s finances are stretched thin. In the same week that the Cabinet cleared the Rs.36,585 crore waiver, reports emerged that around 81 lakh women had been removed from the beneficiary list of the Ladki Bahin (Mukhyamantri Majhi Ladki Bahin) scheme following a State-wide e-KYC verification exercise. Opposition politicians, including NCP (SP) leader Sharad Pawar, attributed the deletions to fiscal pressure; the government said they were the result of eligibility checks and non-compliance with the verification process.

The Ladki Bahin scheme was launched in July 2024, ahead of the State Assembly elections, providing Rs.1,500 a month to eligible women. It is widely credited with helping the Mahayuti secure a landslide in November 2024. Nearly two years on, its cost to the exchequer is hard to ignore. The State budget for 2026-27 has made a provision of Rs.26,000 crore for the scheme. Contractors’ bills worth Rs.89,000 crore from the public works department are pending with the State government; two contractors—one from Sangli, one from Nagpur—died by suicide, reportedly crushed by debt.

The Bombay High Court brought the tension into the open on April 10, 2026. A bench of Justices Ravindra Ghuge and Abhay Mantri, hearing a petition from a retired BMC education department employee who had not received her pension under the Seventh Pay Commission, pulled up the State government. “You have money to spend on the Ladki Bahin scheme, but you are not giving rightful pensions to ex-employees. If you can’t give the pension, then stop the Ladki Bahin scheme,” the bench said.

According to the State budget for 2026-27, Maharashtra is already expecting a revenue deficit of Rs.40,552 crore. The fiscal deficit is projected at Rs.1.5 lakh crore, with the current figure at 2.78 per cent—just below the 3 per cent ceiling. The farm loan waiver will push that ceiling closer.

BJP MP from Satara Udayanraje Bhosale put it plainly when he spoke to reporters on May 24, 2026. “Due to the Ladki Bahin scheme, there is a huge burden on the State’s treasury. We do not get the funds expected for development. But now the planning of fund management is going on,” he said.

Politics before the drought

There is a separate, less cynical argument for the timing. The India Meteorological Department (IMD) revised its 2026 monsoon forecast in late May to 90 per cent of the long-period average, with a 60 per cent chance of a deficient season. Nearly 70 per cent of Maharashtra’s agriculture depends on the Kharif crop, which is entirely monsoon-dependent. Historically, farmers’ suicides in the State have spiked in drought years. Clearing debt before the season turns bad, proponents argue, can prevent the worst.

A senior NCP (Ajit Pawar) MLA from Marathwada was candid about the political arithmetic. “See around. The anti-incumbency has already started creeping in. There will be many efforts to arrest it. The farm loan waiver is also a political decision ahead of tough times. It was a necessary and deliberate attempt,” he said.

Almost a decade ago, Prime Minister Narendra Modi promised from every rally platform that his government would double farmers’ incomes by 2022. That deadline passed long ago, and the government neither doubled incomes nor guaranteed farmers the cost of their own inputs. Modi no longer mentions the slogan. The farm loan waiver, once treated as an emergency measure, has become the permanent instrument of last resort.

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