Tamil Nadu Modifies Crop Loan Waiver Scheme With ₹75,000 Flat Relief and Extra Funds

The Tamil Nadu government has changed its crop loan waiver scheme to give a flat waiver of ₹75,000 to farmers who took loans of more than ₹75,000 from cooperative institutions. Farmers who borrowed up to ₹75,000 will still get their full loan amount waived off completely.

Loan Limits

Under the old rules, farmers with loans between ₹75,000 and ₹1 lakh got a maximum waiver of ₹75,000, while those who borrowed more than ₹1 lakh received only ₹35,000. The new rules give a flat ₹75,000 relief to anyone with a loan higher than ₹75,000. The state has also extended the cutoff date for eligible loans by a month to March 31, 2026. The original dates for covered loans were between May 1, 2025, and February 28, 2026. The Cooperation, Food and Consumer Protection Department issued a formal order for these updates.

Costs and Beneficiaries

The state has approved an extra ₹2,842.77 crore to run this larger scheme. The total cost for the revised loan waiver now stands at ₹9,062.83 crore, out of which ₹6,220.056 crore is already paid out. A total of 5,90,621 farmers with loans up to ₹75,000 will get a complete waiver, and 7,34,260 farmers who borrowed more than that will get the flat ₹75,000 relief. The scheme also includes 10,810 farmers who already paid back their loans fully before the waiver was announced, along with various interest refunds for eligible people.

Context

Cooperative institutions play a big role in rural finance by giving small loans to farmers for seasonal farming needs. Governments often step in with loan waiver programs to help farmers clear heavy debt when they face financial trouble due to poor crop yields or other money problems.