Special Article :
A Historic Decision: Maharashtra's Biggest Farm Loan Waiver
Farmers constitute the backbone of Maharashtra's rural economy. To provide relief to cultivators facing financial distress due to irregular rainfall, hailstorms, drought, excessive rainfall, floods and other natural calamities, and to ensure that they regain access to fresh crop loans while strengthening the agricultural sector, the Maharashtra Government has announced the Punyashlok Ahilyadevi Holkar Farm Loan Waiver Scheme 2026, the largest farm loan waiver programme in the state's history.
Punyashlok Ahilyadevi Holkar was an able administrator and a people's ruler who dedicated her life to the welfare of her subjects. Her contributions to agriculture, irrigation, water conservation and the rural economy continue to serve as an inspiration. She understood the hardships faced by farmers and was committed to ensuring justice for them. As her 300th birth anniversary is being commemorated this year, the Government has named this landmark farmer welfare initiative after her as a tribute to her enduring legacy.
Over the years, the State Government has consistently supported farmers through major debt relief initiatives, including the Chhatrapati Shivaji Maharaj Shetkari Sanman Yojana (2017), the Mahatma Jyotirao Phule Farmer Loan Waiver Scheme (2019), and the Incentive Benefit Scheme under the Mahatma Jyotirao Phule Loan Waiver Programme (2022).
Despite previous loan waivers, many farmers continued to fall into a vicious cycle of debt. Recognising the need for both immediate relief and long-term structural reforms, the Government constituted a High-Level Committee under the chairmanship of Pravin Pardeshi, Principal Economic Adviser to the Chief Minister and CEO (MITRA), to recommend measures aimed at permanently freeing farmers from indebtedness.
The committee examined why farmers repeatedly require loan waivers, why their incomes remain unstable, and what short-term and long-term reforms are needed to prevent them from falling back into debt while making agriculture more sustainable. Acting on the committee's recommendations, the Government has now taken the historic decision to implement the Punyashlok Ahilyadevi Holkar Farmer Loan Waiver Scheme.
What the Scheme Offers
Following the loan waivers of up to ₹1.5 lakh in 2017 and ₹2 lakh in 2019, the Government has once again announced loan waiver assistance of up to ₹2 lakh per eligible farmer.
The scheme covers overdue short-term crop loans as well as restructured and rescheduled loans.
A significant improvement has been introduced this time. Under previous schemes, farmers whose outstanding loan slightly exceeded the prescribed ceiling were declared ineligible. For example, a farmer with an outstanding loan of ₹2.10 lakh received no benefit. Under the new scheme, such farmers will receive Government assistance of up to ₹2 lakh after paying the excess amount themselves. The objective is to regularise loan accounts and restore farmers' eligibility for fresh institutional credit. Notably, there is no landholding criterion for eligibility.
The Government has also provided for an incentive of up to ₹50,000 for farmers who have consistently repaid their loans on time, thereby encouraging financial discipline and rewarding honest borrowers.
One-Time Settlement (OTS) Scheme
Farmers whose combined outstanding dues—including principal and interest—on one or multiple short-term crop loan accounts across one or more banks exceed ₹2 lakh (for loans availed between April 1, 2019 and March 31, 2026) will be eligible for the scheme after depositing the amount exceeding ₹2 lakh.
As a result, such farmers will be required to pay only the excess amount instead of clearing the entire outstanding loan. They will be given time until March 31, 2027 to deposit their share.
Incentive Benefits for Prompt Repayment
To reward disciplined borrowers, farmers who availed crop loans during any two of the financial years 2022-23, 2023-24 or 2024-25 and repaid them before June 30 or within the due date prescribed by their banks will receive an incentive benefit of up to ₹50,000 per farmer.
To remain eligible, they must also repay their short-term crop loans for the financial years 2025-26 and 2026-27 within the stipulated time.
Further, farmers who completely repaid short-term crop loans during 2023-24 or 2024-25, where the repaid amount was less than ₹50,000, will receive either the actual repaid amount (including principal and interest) or a minimum incentive of ₹5,000, whichever is applicable.
Additional Relief for Regular Borrowers
The scheme also provides special relief to beneficiaries of the Mahatma Jyotirao Phule Farmer Loan Waiver Scheme, 2019.
Farmers whose restructured or rescheduled short-term crop loans (availed between April 1, 2019 and March 31, 2025) had overdue instalments of up to ₹50,000 as on September 30, 2025 will receive complete loan waiver. Those with overdue amounts exceeding ₹50,000 will be eligible for the One-Time Settlement (OTS) Scheme and will have time until March 31, 2027 to deposit their share.
Eligibility Criteria
Eligible farmers will receive loan waiver assistance of up to ₹2 lakh, including principal and interest.
The scheme applies to short-term crop loans availed between April 1, 2019 and March 31, 2025.
Loans overdue as on September 30, 2025 and remaining unpaid till March 31, 2026 are covered.
There is no landholding criterion.
Restructured and rescheduled crop loans converted into medium-term loans are also eligible up to ₹2 lakh.
Farmers with outstanding loans exceeding ₹2 lakh will be eligible after depositing the excess amount by March 31, 2027.
Aadhaar authentication is mandatory.
The scheme covers loans from nationalised banks, private banks, regional rural banks, district cooperative banks and primary agricultural credit societies.
Ineligible Categories
The following categories will not be eligible for benefits:
Present or former Ministers, Ministers of State, Members of Parliament, Members of the State Legislature, and present or former members of Zilla Parishads, Panchayat Samitis and Urban Local Bodies.
Officers and employees of the Central or State Government drawing a combined monthly salary exceeding ₹25,000.
Officers and employees of State Public Sector Undertakings (such as MSEDCL, MIDC, MSRTC, etc.) and aided institutions receiving a combined monthly salary above ₹25,000.
Individuals paying income tax on non-agricultural income.
Pensioners receiving a monthly pension exceeding ₹25,000 (former servicemen are exempt from this restriction).
Chairpersons, Vice-Chairpersons, Directors, Officers and employees earning more than ₹25,000 per month in Agricultural Produce Market Committees, Cooperative Sugar Factories, Cooperative Spinning Mills, Urban Cooperative Banks, District Central Cooperative Banks, Maharashtra State Cooperative Bank and Cooperative Milk Unions. However, seasonal workers employed in cooperative sugar factories remain eligible.
Transparent and Fully Digital Implementation
The entire implementation process of the scheme will be conducted through a transparent online system.
The Government estimates that around 5.6 million (56 lakh) farmers will benefit, with financial assistance amounting to approximately ₹36,500 crore.
This is set to become the largest farm loan waiver programme in Maharashtra's history. More than merely waiving loans, the initiative seeks to strengthen farmers financially, restore their confidence, and inject new momentum into the State's agricultural economy.
Kashibai Thorat
Divisional Liaisoning Officer
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