The farm loan waiver announcement made everyone think that it might upset the fiscal health of the state cooperative societies. It was even predicted that the waiver would shut some of the societies, but Chief Minister Kamal Nath managed to save them. The societies were supposed to be reimbursed the loan amount and the money given as capital share. The finance department, at the end of the fiscal year, has released a sum of Rs 1,000 crore for capital share to these societies for farm loan waiver.
The cooperative department had to take Rs 2600 crore as capital share for societies for loan waiver amount of Rs 4100 crore. The capital share was hovering as financial crisis over these societies. The cooperative department has been granted Rs 1700 crore from the money given as farm loan. Cooperative department may now get the remaining amount from the vote-on-account approved for 2019-20.
The cooperative banks and societies had waived loans of around 19 lakh farmers. The loan amount of these farmers in the accounts of cooperative societies has been turned into nil. As it was loan waiver process, the accounts of the societies show them as money to be taken from the government.
The farmers have been issued certificate of farm loan waiver. Cooperative department has to be allocated Rs 2400 crore from the government. If cooperative societies are given the remaining Rs 1600 crore from share capital then the financial condition of these societies would be further strengthened.