CHENNAI — In a major development for the state’s agrarian sector, Tamil Nadu Chief Minister C. Joseph Vijay announced a sweeping expansion of the cooperative crop loan waiver scheme, offering comprehensive financial relief to millions of rural families. Under the newly revised package, the state government will completely waive crop loans up to ₹75,000 availed by farmers through Primary Agricultural Cooperative Credit Societies (PACS) and cooperative banks between May 1, 2025, and February 28, 2026. This decision enhances a previous, more restrictive policy that had only capped full waivers at ₹50,000 exclusively for small and marginal farmers.
The policy shift comes after rigorous representations from major agricultural unions across Tamil Nadu’s delta and southern districts, who argued that erratic weather cycles and volatile market conditions had severely degraded rural repayment capacities. Recognizing the financial distress, the government has widened the net to cover approximately 14.43 lakh farmers—comprising 8.34 lakh marginal, 5.16 lakh small, and over 93,000 large-scale farmers. Furthermore, for individuals whose outstanding cooperative credit balance exceeds the ₹75,000 ceiling, a flat partial waiver of ₹35,000 will be applied automatically, making this one of the most inclusive financial interventions in recent state history.
Financially, this welfare expansion will impose a significant additional burden of ₹5,932.23 crore on the state exchequer. In strict accordance with the Reserve Bank of India’s (RBI) Model Operating Procedures for Government Loan Waiver Schemes, the Tamil Nadu state administration has committed to fully disbursing and settling the entire waiver amount to the respective cooperative banks within a strict 45-to-60-day window. State authorities emphasized that clearing these bad debts quickly will immediately restore the eligibility of local farmers to secure fresh institutional credit, pumping crucial capital back into the rural economy just ahead of the upcoming primary cultivation season.