States will have to generate own resources for farm waivers: Finance Minister
Arun Jaitley said the government had nothing more to say on the matter. Photograph: (Reuters)
Indian Finance Minister Arun Jaitley clarified on Monday that the federal government would not fund farmers' loans waived by the state government.
The finance minister's statement comes a day after the Maharashtra government waived farmers' loans.
Asked about the Maharashtra government's decision, Arun Jaitley made it clear that there will be no funding by the federal government.
"I have already made the position clear that states which want to go in for these kind of schemes (farm loan waivers) will have to generate them from their own resources. Beyond that the central government has nothing more to say," Arun Jaitley said.
Farmers in Madhya Pradesh have also demanded against relief from debt, sparking violent protests in the state.
Uttar Pradesh was the first state this year to announce a whopping Rs 36,359 crore farm debt waiver for small and marginal farmers.
Farmers in many states across the country are in distress because of sharp fall in prices in both domestic and global market.
Reserve Bank Governor Urjit Patel has already cautioned against loan waiver, and warned that the fiscal situation will go out of hand and may lead to inflation if the states continue with waivers.
"The risk of fiscal slippages, which by and large can entail inflationary spillovers, has risen with the announcements of large farm loan waivers," the RBI said in its second bi-monthly monetary policy review for 2017-18 announced last week.