Maharashtra loan waiver: 7th pay panel arrears to 19 lakh state govt staff may be delayed by a yearr

The decision to waive off agriculture loans of farmers from Maharashtra by chief minister Devendra Fadnavis could force the state government to slash budget of several projects and development schemes.

Not just that, the farm loan waiver decision could also delay the implementation of the keenly awaited 7th pay commission to the state government staff.

As the state is expected to take a hit of around Rs 25,000-Rs 27,000 crore due to farm loan waiver decision, the seventh pay commission payout to state government staff could be delayed by at least a year, said The Times of Indiareport.

Representational image

Representational image

“Implementation of the 7th pay commission will be pushed back by at least a year.Government is not in a position to take that burden this year too,” TOI report quoted a government official as saying.

An estimated Rs 15,000 crore will be required for state to implement the 7th pay commission and clear arrears from January 2016. A total of nearly 19 lakh staff will be the key beneficiaries, while the state would require an extra Rs 5,000 crore annually to keep revising their pay structures, the TOI report said.

The farm loan waive off burden comes at a time when the state’s debt has exceeded Rs 4 lakh crore.

Bowing to pressure from the farmer’s agitation across the state for past several weeks, the Fadnavis government took a decision to waive off farm loans of all the farmers from the state. Several state governments have been forced to take decision to write off farm loans in recent months.

Finance minister Arun Jaitley in a statement a day before stated that state governments giving farm loan reliefs will not get any help from the central government.

The growing farmers’ resentment in most of the states came after Uttar Pradesh’s new government wrote off Rs 35,000 crore in farm loans, keeping with the promise made during state polls.

Similarly, states like Madhya Pradesh, Haryana, Rajasthan and Punjab, too, have been witnessing growing agitation from the farmers for agriculture loan relief.

In most of the states, loans of small farmers accounts for nearly 80 percent of the fiscal deficit last year, Hindustan Timesreport said.

In 2009, the UPA government in a biggest farm debt waiver wrote off farm loans of Rs 72,000 crore.