Economic Impact of Farm Debt Waiver Scheme on Farmers Livelihood in Punjab

The present study was undertaken to evaluate the impact of ‘Farm Debt Waiver Scheme’ announced by the Governments of Punjab in 2017 on the extent of indebtedness and livelihood of beneficiary farmers in Punjab. The data were collected for the pre-debt waiver and post debt waiver period by randomly selecting 180 beneficiary farmers¹. The results brought out that there was no change in the primary occupation of beneficiaries, however, some of them invested in dairy enterprise. After loan redemption, higher change in income was observed in case of beneficiaries having income more than Rs. four lakh. There was slight change in the operational holding due to farmers taking more area under lease while household expenditure escalated after redemption of loan. Major benefit of crop loan waiver scheme was availed by beneficiaries taking loan from co-operative societies. Institutional loan waive off resulted in significant decline in the dependence of sampled households on non-institutional sources of finance. Thus, loan waiver scheme helped the farmers to diversify their pattern of savings in more rational manner and there was decline in indebtedness. The farmers reported that they lost man days to fulfil the requirements for availing scheme benefits, and it was time consuming and cost incurring also. To make the scheme attractive, these constraints should be taken care of. Major policy issues suggested were; expanding the reach of scheme to include more farmers, increasing subsidies on farm machinery and facilitating the farmers to rear good breed livestock.