Maharashtra's Budget 2026, revealed on March 6, offers major relief for farmers as the state government has pledged to wave farm loans of up to Rs 2 lakh for the eligible beneficiaries.
The scheme, called 'Punyashlok Ahilyadevi Holkar Shetkari Karjmafi Yojna', is projected to cost Rs 35,000 crore to the exchequer. It aims to reduce rural distress and help farmers in debt.
Chief Minister Devendra Fadnavis, who also holds the finance portfolio, presented a Rs 7.69 lakh crore state budget in the assembly. Notably, the crop loan waiver scheme fulfils a key promise made before the 2024 elections.
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As part of the relief measures, farmers with 7.5 HP pumps will get Rs 20,000 crore in power bill relief. The government will also give incentives for timely loan repayment. Additionally, there is a push for natural farming to cut costs and promote sustainable practices.
A new digital platform will connect farm produce to global markets, helping Maharashtra farmers sell more easily. Highlighting these measures, Fadnavis said that the relief package and power bill support will boost rural income.
Incentives For Loan Repayment
Under the 'Punyashlok Ahilyadevi Holkar Shetkari Karjmafi Yojna', farmers with outstanding crop loans up to Rs 2 lakh will get a full waiver. All eligible dues till Sept. 30, 2025 will be completely written off to ease the financial situation for the farmers in Maharashtra.
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Additionally, farmers who have regularly repaid their loans will receive incentives of up to Rs 50,000 for timely repayment. The state government estimated that the Punyashlok Ahilyadevi Holkar Shetkari Karjmafi Yojna could benefit tens of lakhs of farmers, encouraging responsible borrowing across Maharashtra.
Maharashtra has about 1.6 crore farmers and about 30 lakh are expected to benefit from the scheme, according to analysts. Of these, nearly 10 lakh are defaulters whose loans will be waived, while another 20 lakh are non-defaulters who will receive incentives for timely repayment.
Scheme Cost Break Up
The Rs 35,000 crore farm loan waiver scheme includes Rs 20,000 crore for waiving overdue loans of defaulting farmers. Another Rs 15,000 crore will go as incentives of Rs 50,000 each to farmers who have repaid loans regularly. Maharashtra has previously announced farm loan waivers twice, in FY18 and FY20.
What Does This Means For Lenders And State Economy?
According to Equirus, after the 2019–20 farm loan waiver, bank NPAs improved over the next year and absolute NPAs fell within six months. As of December 2025, the crop loan GNPA ratio across banks is 12.2%, with higher levels at State Bank of India and Bank of India.
The new scheme is mainly aimed at helping existing overdue borrowers. This means that SBI and BOI will likely be the main beneficiaries from this scheme. Based on past trends in Maharashtra, no significant spike in crop loan NPAs is expected as farmers generally repay loans once relief schemes are implemented, the report added.
However, investment banking company Macquarie Group is of the view that farm loan waivers can hurt credit culture and lead to higher agricultural NPLs. It also noted that public sector banks (PSUs) are likely to be affected more than private banks.
All banks must meet priority sector and agriculture loan targets, and PSU bank customers, often farmers, are more vulnerable, it said, adding that private banks generally have lower agri NPLs. For example, as of FY25, HDFC Bank had agri NPLs of 3.8%, while SBI had 8.4%, it pointed out.
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