While farm loan waiver is going to be major poll rhetoric in Odisha in 2019, a research report authored by senior research officers in RBI’s Department of Statistics and Information Management has predicted the amount outgo on farm loan waiver in Odisha at anywhere between Rs 1,387crore and Rs 6,532crore.

According to a study titled ‘Agriculture loan Bank Accounts – A Waiver Scenario Analysis’, authors Ravi Shankar, Director, Department of Statistics and Information Management, RBI and research officers Rajendra Raghumandra and Sukhbir Singh have analysed the amount of outstanding farm loans worth Rs 1lakh for all category of farmers in Odisha by using the Basic Statistical Return – 1 data of 2016.

The analysis reveals that in Odisha all outstanding agri loans (includes crop loans, investment loans and allied activities like dairy, fishery, poultry and forestry) worth Rs1lakh by the end of financial year 2016 totalled to a whopping Rs 10,847crore.

However, if crop loans worth Rs  1lakh are to be segregated then the amount gets pruned to Rs  6,532crore.

Significantly, the analysis further revealed that if all agri loans worth Rs 1lakh taken by small and marginal farmers alone are to be considered, the amount then see a drastic pruning to mere Rs  2,215crore. And when only outstanding crop loans worth Rs 1lakh of small and marginal farmers are to be considered, the net loan waiver for State farmers then could count mere Rs 1,387crore.

latest data estimated the total outstanding agri loan (crop loan and investment loan) in Odisha by March end 2017 at Rs 23, 687crore, which included loan accounts having amount of over Rs 1lakh. And of this amount around Rs 3,333crore has turned NPA (non performing asset). The total direct agri lending, including allied sectors, in Odisha was over Rs 28,000crore.

Why RBI authors took a limit of Rs 1lakh for loan waiverIJ Recently, four States have gone for loan waivers where UP waived crop loans of Rs 1lakh for small and marginal farmers; Maharashtra has waived crop loans up to Rs 1.5lakh for all farmers; Punjab waived loans up to Rs 2 lakh for small and marginal farmers; Karnataka wrote off only crop loans up to Rs 50,000 taken from cooperative banks only.

 In the above context, the Odisha analysis has been calculated by taking Rs 1lakh as cut-off mark for loan waiver, and the total cost of farm loan waiver in Odisha under various scenarios were worked out in range of Rs 1,387crore to Rs 6,532crore.

Top State Finance Department officials, however, put the estimated cost at around Rs 2, 500crore – Rs 12, 500 crore if loan accounts of Rs 1 lakh of State cooperative banks are considered.

This then brings the moot question to fore: Will the BJD Government go for loan waiver as poll bonanzaIJ Facts convey otherwise. Agriculture expenditure in 2018-19 Budget was mere Rs 4, 511crore, which is 3.7 per cent of total expenditure in 2018-19 from 9.2 per cent in 2014-15.

Moreover, Odisha is now ever more dependent on the Centre notwithstanding the BJD diatribe over Central negligence. Reason: In 2014-15, Odisha funded 49 per cent of revenue receipts from own resources; in 2018-19 Odisha could manage 39 per cent.