R ARIVANANTHAM
CHENNAI, AUG 17
In a significant course correction in Tamil Nadu’s farm-debt relief policy, Chief Minister C Joseph Vijay has widened the safety net for cooperative-bank borrowers, committing another ₹953.06 crore from the State exchequer to ensure that more small and marginal farmers are freed from the weight of crop loans.
Making the announcement under Rule 110 in the Assembly on Monday, Vijay said cooperative agricultural loans up to ₹75,000 would now be waived in full, while borrowers with loans between ₹75,000 and ₹1 lakh would receive a waiver of up to ₹75,000. For loans exceeding ₹1 lakh, the waiver would be ₹35,000, according to the announcement.
- Additional ₹953.06-crore package to extend full waiver to eligible loans up to ₹75,000
- Loans between ₹75,000 and ₹1 lakh to get waiver capped at ₹75,000
- Move follows consultations with agricultural organisations amid State’s fiscal constraints
- Additional relief expected to cover 1.38 lakh farmers, taking cumulative waiver to ₹6,220 crore for 13.34 lakh farmers
- CM says agriculture remains the backbone of Tamil Nadu and farmer prosperity is central to economic progress
- Earlier relief had already benefited more than 14.44 lakh farmers under the State’s revised cooperative crop-loan waiver framework
The move comes despite what the Chief Minister described as the State’s financial constraints, as well as the need to comply with Reserve Bank of India requirements concerning timely settlement of dues with cooperative banks.
The additional package is expected to benefit more than 1.38 lakh farmers, with the Government committing approximately ₹953.06 crore towards the fresh relief.
From ₹50,000 to ₹75,000: relief gets a second lift
The announcement marks another expansion of the farm-loan relief framework unveiled by the Vijay Government.
The Government had earlier announced a waiver of agricultural loans up to ₹50,000 within 15 days of assuming office in May. The relief was subsequently expanded, with more than 14.44 lakh farmers brought within the benefit framework.
Following consultations with agricultural organisations on August 7, the Government decided to provide further relief despite the prevailing fiscal pressures, Vijay said.
The latest decision effectively raises the full-waiver threshold to ₹75,000, giving additional breathing space to farmers whose cooperative crop loans fall within that bracket.
The broader scheme, according to the figures cited in the announcement, will take the total waiver amount to about ₹6,220 crore covering 13.34 lakh farmers, with the latest tranche accounting for the additional ₹953.06-crore commitment.
‘Agriculture is the backbone of the State’
Vijay underlined the centrality of agriculture to Tamil Nadu’s economy and rural livelihoods while defending the decision to deploy additional public resources despite fiscal constraints.
The Chief Minister stressed that the prosperity of the nation depends on supporting farmers, making the latest waiver a measure intended to ease financial pressure on cultivators and help them continue agricultural activity without the immediate burden of cooperative credit.
The Government’s decision also comes against the backdrop of Tamil Nadu’s long-standing reliance on cooperative institutions for short-term agricultural credit. The State’s agricultural budget has previously earmarked substantial amounts for cooperative crop lending, underscoring the importance of the cooperative banking network to farm finance.
RBI norms add urgency to settlement
The Chief Minister said the decision had been taken after considering the financial position of the State and RBI guidelines requiring rapid settlement with cooperative banks.
This aspect is significant because a loan waiver does not simply erase a farmer’s liability; the Government must compensate the cooperative credit institutions for the eligible amount so that their lending capacity is not impaired.
Tamil Nadu’s cooperative sector has historically played a major role in providing agricultural credit. Government documents show that the State has previously implemented large-scale crop-loan waiver programmes through cooperative banks and societies, with substantial sums released to institutions towards waiver liabilities.
A ₹6,220-crore relief architecture
The latest announcement adds another layer to the State’s evolving farm-loan waiver architecture.
Under the revised arrangement:
| Loan amount | Waiver announced |
| Up to ₹75,000 | 100% waiver |
| Above ₹75,000 and up to ₹1 lakh | Up to ₹75,000 waiver |
| Above ₹1 lakh | ₹35,000 waiver |
The additional relief is projected to cover 1.38 lakh farmers, while the cumulative waiver under the current framework is pegged at approximately ₹6,220 crore for 13.34 lakh farmers.
The Government’s latest move follows its earlier announcement of a crop-loan waiver benefiting more than 14 lakh farmers, signalling that farm-credit relief remains a major component of the new administration’s welfare agenda.
Relief beyond the balance sheet
For farmers, the significance of the announcement extends beyond the arithmetic of loan books. Relief from cooperative crop debt can restore borrowing capacity ahead of the next cultivation cycle, reduce repayment pressure and potentially enable farmers to approach cooperative institutions again for fresh agricultural credit.
For the Government, however, the challenge will be to ensure that the waiver is implemented quickly, transparently and without weakening the financial health of the cooperative credit system.
With an additional ₹953.06 crore now committed, the policy places the State’s fiscal capacity and its cooperative banking network under renewed scrutiny even as it seeks to provide immediate relief to cultivators.
The political message is unmistakable: at a time when rural credit stress remains a persistent challenge, the Vijay Government is choosing to deepen farm-debt relief rather than leave the smallest borrowers at the mercy of mounting repayment pressures.
