Finance Minister Arun Jaitley on Monday said that the states which are keen on farm loan waiver “must generate funds from their own resources”.
Jaitley’s comment comes in the backdrop of Maharashtra government’s decision of a total loan waiver for farmers in the state.
According to estimates, the Maharashtra government will have to provide Rs 1.14 lakh crore to waive off entire loan burden of all 1.36 crore farmers in the state. However, total loan waiver of marginal and small farmers only amounts to Rs 30,000 crore.
Earlier in April, the newly elected Yogi Adityanath-led Uttar Pradesh government had also announced waiver of Rs 36,000-crore farm loan in its first cabinet meet. The decision led to similar demands in states like Maharashtra, Madhya Pradesh and Punjab.
Jaitley made the comment while discussing the issue of non-performing assets (NPAs), finances of banks, review of financial inclusion in his meeting with heads of public sector banks (PSBs).
The finance minister told reporters that the PSBs have made stable operating profit of Rs1.5 trillion in 2016-17, net profit at Rs574 crore after provisioning.
He also acknowledged that there’s challenge on credit growth as well as the need for a speedy resolution for all pending NPA cases.