The Madurai bench of the Madras High Court had on April 4 extended the Tamil Nadu loan waiver scheme to all farmers even though the scheme intended to help only small and marginal farmers with 5 acres of land. The bench had also ordered cooperative societies and banks to waive the loans and not recover any dues. The government had moved the top court in May against the order.
The stay brings relief to the Tamil Nadu government that had argued that the aim was to provide relief only to small and marginal farmers. The government had taken the decision after considering vital parameters -- budgetary allocation, revenue mobilisation, the position of the farmers viz-a-viz their land holding and other considerations, said an official.
Subramania Prasad, who was representing the government, told the top court that the High Court decision will impact the state's finances.
The bench of Justices Madan B Lokur and Deepak Gupta accepted the argument and said the loan waiver from cooperative banks and societies will apply only to small and marginal farmers. The court will take up the case for further hearing after four weeks.
With 60 per cent deficit in rainfall, Tamil Nadu witnessed its worst drought in 140 years. The farmers demanded a Rs 40,000-crore drought relief package, farm loan waiver and setting up of the Cauvery Management Board by the centre and called off their protest after an assurance from Chief Minister E Palaniswami that their demands will be met.
But the farmers claim that the Tamil Nadu government has so far "failed to meet their demands". Last month, they had threatened to renew their protest till the Central government announces relief for farmers.