Truth behind UP govt waiving farmer loans of 19 paisa

Since last two days, Twitter is abuzz about the “insensitivity” of Uttar Pradesh Government for waiving farmers’ loans ranging between a few paisa to as low as Rs. 10 and Rs. 37.

However, truth seems far from what is reported and peddled.

As a Twitter user pointed out, it is a trick reporting. The Twitter user elaborates that the total outlay of loan waiver was Rs. 36,000 crore, which was to be exhausted. The calculations were carried out according to a formula and all payments were done digitally, to remove possibility of frauds. While larger amount of loans were waived off, in some cases, many farmers had paid off their loans in the current year, where only fraction of the amount payable was due.

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As per this report, if a farmer had Rs. 51,050.9 in their loan account, and the farmer paid off Rs. 51,050 in the current year, the balance 90 paisa would still show as outstanding loan amount. Since 90 paisa is not in circulation, the amount will keep reflecting as outstanding loan balance. In order to avoid the same, 90 paisa were waived off. Hence, the farmer would get loan waiver certificate of 90 paisa.

As per reports, 11.9 lakh small and marginal farmers were given loan waiver certificate of Rs. 7,317 crore. Of these, about 11.25 lakh farmers have received loan waiver of over Rs. 10,000.

The loan waiver is for those loans which were borrowed before 31st March, 2016. After long deliberation, the government has started the loan waiver from 17th August onward. According to Gaon Connection report, Kannauj resident Rajesh Shukhla, in 2016, he had borrowed Rs. 62,000. He got loan of Rs. 315 waived. He claims the farmers are being misguided by some people.

So it appears that an algorithm was used to waive every non-zero outstanding amount, and some minuscule amounts also qualified for that, which was cherry-picked by some media reports to make a sensational story.

Hence, it seems like it was just a mischievous and click-bait headline by the media to grab eyeballs.

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