With reference to the Tamil Nadu crop loan waiver scheme, consider the following statements: 1. The total estimated expenditure for the revised scheme is ₹9,062.83 crore. 2. The scheme covers loans obtained by farmers until March 31, 2025. 3. The scheme provides a flat ₹75,000 waiver for eligible farmers. Which of the statements given above is/are correct?

Tamil Nadu sanctions ₹2,842.77 crore for revised crop loan waiver scheme

GS3Economy · S&T · Environment · Security· MSP, procurement, PDS & food security· Prelims· 7 November 2026

State-sponsored debt waivers: a GS3 case study on fiscal federalism and agrarian distress.

Why in news

The Tamil Nadu government sanctioned ₹2,842.77 crore to restructure its crop loan waiver scheme, providing a flat ₹75,000 waiver for eligible farmers.

Background

The Cooperation, Food and Consumer Protection Department announced the scheme, which covers loans obtained by March 31, 2026. The total estimated expenditure for the revised scheme is ₹9,062.83 crore.

Facts for Prelims

FactThe Tamil Nadu government sanctioned an additional ₹2,842.77 crore for the revised crop loan waiver scheme.
FactThe total estimated expenditure for the revised scheme is ₹9,062.83 crore.
FactThe scheme provides a flat ₹75,000 waiver for farmers with loans exceeding ₹75,000.
FactEligibility extends to loans obtained by March 31, 2026.
BodyThe scheme was announced by the Cooperation, Food and Consumer Protection Department of Tamil Nadu.

Prelims practice question

With reference to the Tamil Nadu crop loan waiver scheme, consider the following statements:

The total estimated expenditure for the revised scheme is ₹9,062.83 crore.
The scheme covers loans obtained by farmers until March 31, 2025.
The scheme provides a flat ₹75,000 waiver for eligible farmers.

Which of the statements given above is/are correct?

(a)1 only
(b)3 only
(c)1 and 3 only
(d)2 and 3 only

Show answer

Answer: (c) 1 and 3 only — Statements 1 and 3 are correct. Statement 2 is incorrect: The eligibility extends to loans obtained by March 31, 2026.

For Mains

Q. Evaluate the fiscal implications and socio-economic impact of state-sponsored crop loan waiver schemes on agricultural sustainability and state debt.

Dimensions to cover in your answer

Fiscal strain: Impact of large-scale debt waivers on state exchequer and long-term fiscal deficit
Credit cycle disruption: Potential for reduced lending by cooperative banks and private lenders to small farmers
Debt trap mitigation: Effectiveness of flat-sum waivers versus interest-subsidized credit for distressed farmers

Keywords: Fiscal Federalism · Agrarian Distress · Debt Waiver · Credit Accessibility · State Expenditure

Read the full news →Report a mistake in this note How notes are made Source: The Hindu ↗Also: GS3 · Fiscal policy, budget & taxation (GST)Also: GS2 · Government policies & schemes

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