65 pc of Rs. 9.50 Lakh Crore Agri Debt May Be Waived: Nomura

New Delhi: As the clamour for loan waiver for farmers rises across the country, the Japanese brokerage Nomura has estimated over 65 per cent of the total Rs 9.50 lakh crore of agri debt may be waived.

“We estimate that 2/3rd of the agri debt of Rs. 9.5 lakh crore is in states where a debt waiver has been announced or promised, or in states that will go to the polls in the next two years,” Nomura analysts wrote in a report.

“With expectations of a waiver now increasing in other states, there is a possibility of agri stress increasing elsewhere, especially poll-bound states,” the report added.

Such waiver, according to the brokerage, “sets the wrong precedent for future servicing, and impacts credit behaviour in other states”.

While Uttar Pradesh, which recently elected the BJP government, announced a Rs. 36,500 crore waiver for farmers, Maharashtra is all set to wave loans worth Rs 30,000 crore.

Uttar Pradesh, India’s most populous state and Maharashtra announced waivers of Rs 36,500 crore and Rs 30,000 crore, respectively. Telengana and Andhra Pradesh announced waivers of Rs 17,000 and Rs 22,000 crore respectively.

According to Nomura 85, per cent of total agri debt is with Public sector banks, including the commercial lenders and the regional rural banks.