Peculiarities of local custom ensure that a major part of Punjab’s farmers remain beyond the purview of this relief. As per the scheme, the debt waiver is available to farmers with less than five acres. In Punjab close to two-thirds of land holdings tilled by individual farmers are less than this size, but the ownership of land is still shown in a consolidated land holding form. For instance, if a farmer owned 10 acres, which was further divided amongst his four sons, who are tilling 2.5 acres each, the total land is still shown in the name of the farmer.

Chief Minister Parkash Singh Badal explains, “The Union Finance Minister took farm holding and not individual ownership of land as the qualifying unit. In most cases, the ancestral land remains in joint holdings.”

Farm holdings in Punjab are known as “khevat” and as per data collected by the state government, only 29 per cent of farmers in the state have land holdings less than five acres and are entitled to this relief (as against 66 per cent individual farmers who own less than five acres).

“This is a custom unique to Punjab and the state should not be penalised. In Haryana, 50 per cent of land holdings are less than five acres, while in Himachal, around 80 per cent land holdings are less than five acres. Ditto for most southern states. This creates a faulty perception that Punjab’s farmers are prosperous, whereas they have been suffering enormously,” said the Chief Minister.

The total institutional outstanding loan in Punjab is Rs 22,000 crore and under the current scheme, the total amount to be waived in Punjab would be only Rs 1,223 crore. Neighbouring Haryana is expected to benefit by around Rs 4,600 crore. The rural indebtedness in Punjab has been exacerbated by local moneylenders and the total informal sector outstanding loan in Punjab is as high as Rs 13,000 crore.