NEW DELHI: The Supreme Court on Monday stayed the Madras High Court’s order, which directed the State to waive loans of all farmers who incurred losses during the drought. The bench headed by Justice Madan B Lokur added that the loan waiver from cooperative banks and societies would apply only to small and marginal farmers. The court slated further hearing after four weeks.
The crop loan waiver scheme for farmers was notified by the Food and Consumer Protection Department in May 2016. In April, the Madurai bench of the Madras High Court extended the Tamil Nadu loan waiver scheme to all farmers even though the scheme intended to help only small and marginal farmers with up to five acres of land. The court had also restrained cooperative societies and banks from recovering their dues.
During the hearing, Subramania Prasad, who was representing the government, told the bench that the High Court decision would have an impact on the State’s finances. He submitted that the government had ordered the waiver of crop loans for small farmers by cooperative societies and banks to fulfill its poll promise and the list of beneficiaries was prepared in 2016 as the government intended to give relief only to small farmers after taking into account budgetary allocation and revenue collection.
Nearly 500 farmers from the State had protested for over a month in the national capital to press for their demands. The State witnessed its worst drought in 140 years this year.
What the HC had ordered
In April, the Madras High Court extended the TN loan waiver scheme to all farmers. The scheme was aimed at helping only small and marginal farmers