Lucknow, September 6: Farmers who have taken loans up to Rs 50,000 with land mortgage, and have paid back at least 10 per cent of the amount, will benefit from the Akhilesh Yadav government’s loan waiver which is likely to be formally announced next week.

The UP Sahkari Gram Vikas Bank, commonly known as the land development bank, will implement the loan waiver scheme which is estimated to benefit 3.5 lakh farmers and cost the exchequer Rs 1,500 crore, up from Rs 500 crore provided for in the budget, it is learnt.

In its election manifesto, the Samajwadi Party had promised to waive off farmers’ loans up to Rs 50,000. The Chief Minister gave his nod to the scheme last week.

Ram Jatan Yadav, Managing Director of Land Development Bank (LDB), said the condition of 10 per cent repayment had been inserted to ensure that only those farmers benefit “who are not wilful defaulters, they wanted to repay, but could not due to adverse conditions”.

Yadav said that the bank had received instructions from the state government not to take any action which could cause harassment of farmers for recovery of loan. Therefore, the bank has stopped making recoveries and issuing notices to farmers.

The bank had recovered Rs 774 crore and disbursed loans totalling Rs 728 crore last year, but this year, till June 30, the recovery has been stagnant at nearly Rs 350 crore. “As we are not issuing notices, no farmer is coming forward for repayment,” he explained.

Initially, the government wanted to include farmers loans from all banks, including the UP Co-operative Bank, district co-operative banks, land development bank and commercial banks. But these loans added up to a staggering Rs 14,000 crore.

It was then decided to insert riders in the scheme to narrow down the list of beneficiaries. The main among the riders was that only farmers who had mortgaged their lands would benefit.

The only bank that gives loans up to Rs 50,000 to farmers against mortgage of their agricultural land is the LDB. Other co-operative banks do not mortgage land at all while commercial banks do not mortgage land for loans below Rs 1 lakh.