Ahead of the monsoon session starting June 22, Maharashtra Chief Minister Devendra Fadnavis’ decision to implement the Rs 36,585-crore Punyashlok Ahilyadevi Holkar crop loan waiver scheme is likely to give the Mahayuti government much-needed political mileage. The scheme is also expected to bring some relief in rural Maharashtra as crop loan waiver covers a sizeable segment of small and marginal farmers, especially in the backward and drought-prone Vidarbha and Marathwada regions.Over the years, the loan waiver became a powerful weapon for the ruling dispensation to placate the unrest in the agriculture sector during elections. So the government’s decision to enforce the loan waiver now has come unexpected to many within the ruling and opposition camps.A highly placed source in the government said, “With El Nino coupled with fuel and fertiliser crisis, farmers’ problems have increased manifold. The uncertainty amongst them, especially small and marginal farmers in Vidarbha and Marathwada, was palpable. Through the loan waiver, the attempt is to bring some feel-good factor among the most vulnerable farmers.”The state government has directed departments concerned to credit the loan waiver component in farmers’ bank accounts, subject to the fulfilment of terms and conditions.An insider in the BJP said the party knows crop loan waiver is not a lasting solution. “But in the current grave situation, Rs 36,585 crore towards writing off farmers’ debt is a big step.” The BJP insider also pointed to the state government’s huge financial constraints, with debt surpassing Rs 9.7 lakh crore.A finance department source said, “Part funds will be adjusted against the expenditure curtailed through Ladki Bahin Yojna. But still, there will be a huge amount that the government will have to provide to meet the loan waiver.”The government believes the sum of Rs 36,585 crore will help 56 lakh farmers. In Maharashtra, total cultivators and operational holders account for 1.71 crore. Of these, 90 lakh farmers avail the financial aid of Rs 12,000 annually under the Centre’s PM KISAN Yojna and the state’s Namo Shetkari Mahasanman Yojna. Additionally, the government has provided Rs 14,000-crore waiver for farmers using agriculture pumps up to 7.5 HP.Story continues below this adAlso Read | Six lakh farmers yet to receive 2017 loan waiver benefits, Govt tells AssemblyThe current loan waiver is part of the promise the BJP-led Mahayuti made in its election manifesto during the 2024 Assembly elections. In the budget session in March, the state government expressed its commitment to fulfil the loan waiver promise by June 30.A senior NCP minister said, “In the given situation, this was the best package we could afford. It is definitely not going to please everybody.”As the situation unfolds, the state government may have to make course corrections, he said.Despite conflict within the coalition, the cabinet on Tuesday unanimously gave its consent for the farm loan waiver and passed a resolution hailing the Chief Minister’s decision.Story continues below this adResponding to the criticism from opposition and farmer leaders, a minister said, “What matters to us is how this decision will work at the grassroots. The Opposition’s reaction is natural as we have pre-empted their plan to corner Mahayuti on agriculture issues during the monsoon session.”Welcoming the loan waiver, farmer activist Vijay Jawandhia said, “The next decision the government should take is to make Minimum Support Price (MSP) mandatory for kharif crops. In the absence of MSP, the vicious cycle of debt will continue.”Another decision he batted for was to help farmers cultivate pulses, especially tur dal, in Vidarbha and Marathwada. He said this is one crop that can withstand El Nino (drought-like situations) and is less dependent on fertilisers.The former chairman of the Vasantrao Naik Shetkari Swavalambhan Mission, Kishore Tiwari, observed, “ Without credit reforms, you cannot make farmers self-reliant.”Story continues below this adThe scheme covers short-term crop loans taken between April 1, 2019, and March 31, 2025, and comprises three components: a debt waiver, a one-time settlement mechanism, and incentive benefits for regular borrowers.Under the debt waiver component, farmers with outstanding crop loans of up to Rs 2 lakh, including principal and interest, that remained overdue on September 30, 2025, and unpaid by March 31, 2026, will be eligible for complete relief.The waiver will apply across one or more loan accounts, irrespective of landholding size.To avail of the benefit, borrowers must repay the amount exceeding Rs 2 lakh. Once the excess amount is cleared, the state government will waive up to Rs 2 lakh of the remaining dues.Story continues below this adThe provision will also apply to restructured and re-restructured crop loans. Eligible farmers have until March 31, 2027, to deposit the balance amount.In the past, former Chief Minister AR Antulay had given the first loan waiver worth Rs 100 crore in 1980. It invited objections from the Reserve Bank of India. Later, during the UPA government’s rule (2008-09), then Union Agriculture Minister Sharad Pawar announced a relief of Rs 72,000 lakh crore for the entire country. It was implemented during the tenure of then Congress Chief Minister Ashok Chavan. The state component was Rs 6,400 crore.During his first tenure as Chief Minister, Fadnavis introduced a Rs 34,000-crore loan waiver scheme, Chhatrapati Shivaji Maharaj Shetkari Sanman Yojna, in 2017. The decision came after a severe drought in the state. Three years later, in 2020, then Uddhav Thackeray announced the Mahatma Jyotirao Phule Shetkari loan waiver worth Rs 25,000 crore. In both schemes, the farmers were entitled to a loan waiver up to Rs 2 lakh and a special incentive of Rs 50,000 for non-defaulters.