New Delhi, July 27: The Union Government has explicitly ruled out any plans to introduce a one-time farm loan waiver or targeted restructuring scheme for small and marginal farmers with outstanding debts in public sector banks (PSBs).
The clarification came in a written reply submitted in the Lok Sabha on Monday by Minister of State for Finance Pankaj Chaudhary, addressing questions raised by MP Dr. D. Ravi Kumar regarding growing farm distress and rising indebtedness across the country.
No Union Waiver Proposal Under Consideration
Addressing direct inquiries about potential financial relief, the Ministry confirmed that no proposal for a central loan waiver is currently under consideration by the Union Government.
Instead, the Ministry highlighted existing regulatory mechanisms designed to handle stressed debt:
- Restructuring Discretion: Banks may undertake financial restructuring under the Reserve Bank of India’s (RBI) Master Direction on Resolution of Stressed Assets (updated as of July 1, 2026).
- Board-Approved Frameworks: Restructuring decisions remain entirely at the discretion of individual public sector lenders, subject to their respective Board-approved policies and RBI regulatory guidelines.
- State-Level Status: The State Level Bankers’ Committee (SLBC) of Tamil Nadu confirmed that no crop loan waivers have been extended for outstanding PSB loans in the state over the last three financial years.
State-Wise Agricultural Loan Exposure
According to provisional data submitted by public sector banks on NABARD’s ENSURE portal, massive outstanding agricultural debt burdens persist across several key agrarian states as of March 31, 2026.
