Tamil Nadu Chief Minister C. Joseph Vijay on Monday, 17 August announced an expansion of the state's cooperative farm loan waiver scheme, committing an additional ₹953.06 crore to extend financial relief to over 1.38 lakh farmers across Tamil Nadu. The announcement was made through a statement under Rule 110 in the state Assembly.

Revised Waiver Structure

Under the expanded scheme, agricultural loans of up to ₹75,000 obtained from cooperative institutions will be waived in full. Farmers carrying outstanding loans between ₹75,000 and ₹1 lakh will receive a waiver of up to ₹75,000. For loans exceeding ₹1 lakh, the government will continue to provide relief of up to ₹35,000.

How the Scheme Has Evolved

The TVK government first announced a cooperative agricultural loan waiver — covering loans up to ₹50,000 — within days of taking office in May 2025, with implementation completed within 15 days of assuming charge. The scheme was subsequently broadened to cover higher loan amounts, offering full waivers up to ₹75,000 and partial relief of ₹35,000 for larger loans. Monday's announcement marks the third revision, raising the programme's total financial value to approximately ₹6,220 crore. The government estimates that nearly 13.34 lakh farmers will benefit from the overall scheme.

What Prompted the Latest Expansion

Chief Minister Vijay said the revision followed consultations held with representatives of farmers' organisations on 7 August. During that meeting, farm unions sought additional assistance for cultivators struggling to repay cooperative loans amid rising input costs and broader financial pressures. The government examined their demands alongside the fiscal implications and Reserve Bank of India (RBI) guidelines governing the timely settlement of dues owed to cooperative banks before finalising the revised package.

Government's Position on Fiscal Constraints

Vijay acknowledged that Tamil Nadu is managing considerable fiscal challenges but maintained that the decision to expand the scheme reflected the government's commitment to protecting farming families. 'Agriculture remained the backbone of Tamil Nadu's economy,' he said, adding that the prosperity of both the state and the country depended heavily on safeguarding farmers' interests. The expansion was approved despite the financial constraints confronting the state, he noted.

What Comes Next

With the additional ₹953.06 crore allocation in place, disbursal is expected to reach the newly eligible 1.38 lakh farmers in the near term. Industry and farm bodies will be watching whether the expanded coverage translates into timely credit flow ahead of the next sowing season, particularly as cooperative banks balance RBI compliance with accelerated settlement demands.