IndiaSanjay SawantDec, 10 2017 15:40:55 IST
Comment 2
On Thursday, 7 December 2017, the Maharashtra government announced that its marquee farm loan waiver scheme was well and truly underway. The late-evening press release put out two important figures to show substantial ground had been covered in implementing the scheme:
• The work of identifying beneficiaries for the waiver had gathered pace; out of 71.11 lakh applications, 41 lakh had been validated (green list). This was a near-impossible leap from just 69,832 green listed farmers just ten days earlier on 25 November.
• Rs 19,537 crore, that is, more than 80 percent of the Rs 24,000 crore estimated cost of the scheme, had already been released to the banks.
A day later, on 8 December, the government announced that across the state banks would work over the weekend to speed up disbursal to farmers.
Chief Minister Devendra Fadnavis chairing a meeting with State Level Bankers Committee
These figures suggest that Chief Minister Devendra Fadnavis scripted the narrowest of escapes from a gathering political storm. It would have hit him with full force on 11 December in Nagpur where the state Assembly begins its winter session.
So how did he side-step the storm? Did the government suddenly discover its administrative mojo after weeks of running in the dark? Or was it a political sleight of hand, a mere passing of the buck to somebody else, the banks in this case?
The latest round of Firstpost investigations into the mess the loan waiver scheme has become suggests that it is all that and more. To fully understand how the government is trying to extricate itself from this mess, a bit of background is important.
Events of 7 December
Chief Minister Fadnavis chairs a meeting with the State Level Bankers Committee (SLBC, a working group of all banks), one of many in recent weeks. On the agenda is the status of loan waiver scheme. At Rs 34,022 crore (now revised to Rs 24,000 crore), it is the biggest loan waiver scheme by any state government. But what should have been one of the high points of his tenure had become a first-grade administrative nightmare thanks to the banks.
A few weeks ago, the banks had spoiled his dream of delivering a leakage-free Aadhaar-linked waiver scheme. They had turned in spurious lists of defaulters (beneficiaries of loan waiver) and brought the disbursal process to a complete standstill. The waiver process was to benefit 71.11 lakh debt-ridden farmers. The process was to begin on 18 October and end on 20 November. But as of 25 November, records accessed by Firstpost show, the government had cleared loans only to a tiny “green list” of 69,832 verified beneficiaries.
From ghost accounts to duplicate accounts to imaginary Aadhaar numbers to incorrect outstanding loan amounts, the lists were riddled with unthinkable errors in data-keeping that shake one’s faith in the banking system. It highlighted how casually the banks deal with public funds as explained in this Firstpost investigation.
This shoddy job by the banks has delayed the disbursals by nearly two months. Debt-ridden farmers are getting restive, opposition parties are smelling blood and various government departments are stressing about how to make sense of the rubbish that the SLBC had turned in in the name of a defaulters’ list.
But none of that stress shows up in the chief minister’s meeting with the SLBC, at least publicly. Instead, a chirpy statement is put out by the chief minister’s office saying he “thanked the banks for their contribution to the entire process” and appealed to them to improve their efforts to “rectify errors in the remaining applications in a time bound manner”.
Two important questions arise from the events of 7 December:
• Instead of roasting the banks for rank inefficiency and utter lack of due diligence—bordering on criminal negligence—why was the chief minister thanking the banks for their “contribution to the whole process”? After all, they had, by design or default, completely derailed his plans for a two-level, fool-proof beneficiary-verification process.
• How exactly did the government cover so much ground in ten days between 26 November and 6 December after being grid-locked and immobile for the 40 days prior?
• How exactly did the government cover so much ground in ten days between 26 November and 6 December after being grid-locked and immobile for the 40 days prior?
The tell-all document
A closely-guarded document of the government accessed exclusively by Firstpost affords answers to both these questions. This is a document prepared by the Cooperation Department showing the status of the loan waiver scheme as of 2 December. It consists of two excel sheets, one for scheduled commercial banks (33) and one for district cooperative banks (30). Here is the document:
Loan waiver amount credited to beneficiaries accounts via commercial banks as on 2 December 2017
Loan waiver amount credited to beneficiaries accounts via commercial banks as on 2 December 2017
