Farm loan waivers have been ruled out so that the Centre is not accused of discriminating between states.
Finance Minister Arun Jaitley said on Thursday that the states can use their own resources to grant farm loan waivers.
Speaking in the Rajya Sabha, Jaitley said that the “issue (loan waiver) has cropped up in several states”.
“The Centre has its policies for agriculture sector under which we provide interest subvention and other support. We will continue to give all that,” he said.
The minister added that the “situation where the Centre will help one state and not the others will not arise”.
He said that states will have to find their own means to ensure that farmers are granted waivers.
Jaitley’s remarks follow the decision of Agriculture Minister Radha Mohan Singh in which he said that the newly elected government in Uttar Pradesh will be waiving off loans of small and marginal farmers.
BJP formed the government in India’s most populous state after 15 years following a massive victory in the state elections. The party had promised farm loan waivers in its election manifesto.
Congress party objected to the decision and demanded that the same be done for other states as well.
The promise of farm loan waiver was reiterated by Prime Minister Narendra Modi during the election campaigns in the state.
The state government is not in a mood to renege on the promise it made to the people of Uttar Pradesh. But the problem with the state is that there is a lack of “resources”.
According to a report by the SBI the amount of farm loans to be waived off would be approximately Rs.27,420 crore, which is approximately 8 percent of total revenue the state earned in FY17.