The Indian state of Tamil Nadu on Friday announced that it would waive more than $1.6 billion owed by farmers who had taken out loans from cooperative banks.
Announcing the move in the state assembly, state chief Edappadi K Palaniswami said the scheme would come into immediate effect.
— ANI (@ANI) February 5, 2021
The step is likely to benefit more than 1.6 million farmers in the state, where elections for the state legislature's 234 seats are due to take place in April. The government’s decision is generally seen as a means of wooing farmers. The state’s ruling party AIADMK is set to contest the polls in alliance with the country's ruling Bharatiya Janata Party of Prime Minister Modi.
The state's farmers have been demanding the loan waiver for several years, criticising successive state governments for their failure to address farmers’ main concerns.
On Friday, state chief Palaniswami said that farmers across the state have borne the brunt of cyclones Nivar and Burevi, not to mention excess rainfall in January.
Tamil Nadu’s farming community has been severely affected by unprecedented rainfall that has led to massive crop damage. In the first month of the year alone, the southern Indian state witnessed an average of 138mm of rain as opposed to the usual 17mm in that period.
The rains have proved disastrous especially for farmers growing paddy since the crop which was ready to be harvested has been destroyed by the rains.
Last November, Cyclone Nivar landed in the state causing up to $600 million damages and claiming 14 lives.
With political temperatures rising in the state because of the forthcoming assembly elections, the loan waiver gains importance as it has the potential to sway the farmers' votes for the present government.
Meanwhile, in north India, the national capital New Delhi has witnessed a massive protest for more than three months from several agricultural states over new farm laws passed by Prime Minister Modi’s BJP-led Parliament.