The Maharashtra Cabinet on Tuesday approved the Rs 36,585-crore Punyashlok Ahilyadevi Holkar farm loan waiver scheme, extending relief to an estimated 55.72 lakh farmers across the state.

The scheme covers short-term crop loans taken between April 1, 2019, and March 31, 2025, and comprises three components: a debt waiver, a one-time settlement (OTS) mechanism, and incentive benefits for regular borrowers.

Under the debt waiver component, farmers with outstanding crop loans of up to Rs 2 lakh, including principal and interest, that remained overdue on September 30, 2025, and unpaid by March 31, 2026, will be eligible for complete relief.

The waiver will apply across one or more loan accounts, irrespective of landholding size.

Farmers whose overdue crop loan liabilities exceed Rs 2 lakh will be covered under the OTS scheme.

To avail of the benefit, borrowers must repay the amount exceeding Rs 2 lakh. Once the excess amount is cleared, the state government will waive up to Rs 2 lakh of the remaining dues.

The provision will also apply to restructured and re-restructured crop loans. Eligible farmers have until March 31, 2027, to deposit the balance amount.

The Cabinet also approved an incentive scheme aimed at encouraging timely repayment.

Farmers who have regularly serviced their loans will receive a Rs 50,000 grant, subject to specified eligibility conditions. Borrowers seeking to become debt-free under the scheme must repay dues exceeding Rs 50,000 by March 31, 2027, after which the grant will be credited.

Farmers who had benefited under the 2019 Mahatma Jyotirao Phule Farmer Debt Waiver Scheme but subsequently accumulated fresh crop loan arrears will also be eligible for a waiver of up to Rs 50,000, provided the dues remain outstanding as of September 30, 2025, and unpaid by March 31, 2026.

To qualify for the incentive grant, farmers must have availed crop loans in any two of the three financial years between 2022-23 and 2024-25 and repaid them within the prescribed timelines. They must also repay any crop loan taken during the current financial year on schedule.

A high-level committee headed by the Chief Secretary will oversee implementation of the scheme. Another committee, chaired by the Additional Chief Secretary (Finance), will negotiate with nationalised, private, regional rural and cooperative banks to determine the extent of relief on non-performing assets (NPAs).

The scheme will cover loans availed from nationalised, private, regional rural and district central cooperative banks, as well as crop loans extended by Primary Agricultural Credit Cooperative Societies from their own funds. Aadhaar authentication and registration on the AgriStack platform will be mandatory. The government will develop a dedicated portal for implementation.

Officials in the Cooperation Department said restructured crop loans would also be eligible for relief.

However, income tax payers, government employees, current and former elected representatives, salaried individuals earning more than Rs 25,000 a month, and pensioners drawing monthly pensions above Rs 25,000 will be excluded.

The state government had earlier appointed a committee headed by Maharashtra Institution for Transformation (MITRA) CEO Praveen Pardeshi to finalise beneficiary estimates and assess the fiscal impact of the scheme.