Maharashtra Cabinet Approves Farm Loan Waiver of Up to ₹2 Lakh Under New Debt Relief Scheme

The Maharashtra government has approved a new farm debt relief scheme, making it the third state after Tamil Nadu and Telangana to announce a farm loan waiver, as per news reports.  

The decision was cleared by the state cabinet on Tuesday under the Punyashlok Ahilyadevi Holkar Shetkari Karja-mukti Yojana.  

The scheme includes a loan waiver component, a one-time settlement (OTS) facility and incentives for farmers who have repaid loans within the stipulated period. 

Who Will Be Eligible 

Under the scheme, farmers with overdue short-term crop loans of up to ₹2 lakh will be eligible for a waiver of the entire outstanding amount, including principal and interest. 

The loans must have been disbursed between April 1, 2019, and March 31, 2025. They should have remained overdue as of September 30, 2025, and unpaid until March 31, 2026. 

The government has not prescribed any landholding limit for eligibility under the scheme. 

Provision for Larger Outstanding Loans 

Farmers whose overdue crop loans exceed ₹2 lakh will be covered under the OTS component. To receive the waiver benefit, borrowers will have to clear the amount exceeding ₹2 lakh. 

After payment of the balance amount, they will become eligible for debt relief of up to ₹2 lakh. The deadline for making the required payment has been set at March 31, 2027. 

Another provision allows farmers with overdue amounts above ₹50,000 to receive a grant of ₹50,000 after clearing the remaining outstanding amount. 

Incentives for Regular Borrowers 

The scheme also provides benefits for farmers who have maintained repayment records. Borrowers who repaid crop loans on time in at least 2 of the 3 financial years between FY23 and FY25 can receive an incentive grant of up to ₹50,000. 

Farmers who have taken crop loans during the current financial year will also be required to repay them within the prescribed period to qualify for the incentive. 

Monitoring and Implementation 

The scheme will cover loans taken from nationalised banks, private banks, regional rural banks, district central cooperative banks, and primary agricultural credit societies. 

Aadhaar authentication and registration on the AgriStack platform will be mandatory for beneficiaries.  

The government will also create a dedicated portal for implementation, while a committee headed by the Chief Secretary will monitor the rollout of the scheme. 

Read More: Government Reduces FY26 Spending by ₹60,000 Crore to Meet Fiscal Deficit Target! 

Conclusion 

The Maharashtra scheme combines debt relief, settlement support and repayment-linked incentives for eligible farmers. The government has set separate eligibility conditions and timelines for each component of the programme. 

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