It is learnt that 2.25 crore farmers in Uttar Pradesh will benefit from this Budget sop out of the four crore estimated in the whole country. Nearly 90 per cent of these farmers are borrowers from PSU banks, regional rural banks, district co-operative banks and 13 private banks. As many as 1.35 crore farmers have also been issued Kisan credit cards here, among which most are small and marginal tillers.

Political observers are also debating the effect of this decision on the main political parties in the state. Both Mayawati and Mulayam Singh — the prime ministerial candidate for the fledgling UNPA — were slowly building their defiance of the Congress on the farmer issue, particularly for those in drought-hit Bundelkhand. Mayawati had repeatedly accused the Centre of neglecting Bundelkhand and not clearing the package the state had demanded for the region. However, the Budget provision for farmers is far larger than what the UP government had demanded in its special package.

Incidentally, Mayawati had said at a recent rally that interests on crop loans of small and marginal farmers will be waived. She had demanded the Centre share half the burden of the principal amount. The Centre has now waived off the interest as well as the principal on all outstanding loans.

A happy state Congress President, Rita Bahuguna, said, “The loan waiver is much more than sanjivini for the farmers of Bundelkhand and two other drought-hit districts of Sonbhadra and Mirzapur.”

A similar promise was made before the 1989 general elections by the then Janata Dal, led by V P Singh. Subsequently, the Janata Dal had shown the door to the Congress in the state, as the party’s strength had dwindled to 15 seats after the elections. The “loan waiver” scheme, a brainchild of Haryana’s Jat leader Devi Lal, had polarised rural masses. Though the exact number of beneficiaries can be worked out only after the detailed circular is issued by the Reserve Bank of India, the loan waiver has given “much more than what had been demanded”, said a senior official of the Relief and Revenue department, who had prepared the state’s package.

UP government records show that till December 31, 2007, Rs 13,148 crore was the total outstanding agriculture loan and overdue of farmers in the seven districts of Bundelkhand. This included Rs 10,173 crore of principal amount and Rs 304 crore as interest. In the seven districts of Bundelkhand, the number of loan accounts till December 31, 2007 was 9.28 lakh.