Punjab Cabinet approves Rs 68cr loan waiver for 4,700 SC families

Time of India

2 days ago

Chandigarh: The Punjab Cabinet on Tuesday gave its nod to waive loans of an aggregate amount of Rs 67.84 crore taken by 4,727 Scheduled Caste (SC) and disabled loanees from the Punjab Scheduled Castes Land Development and Finance Corporation (PSCFC), with chief minister Bhagwant Mann stating that debt accrued until March 31, 2020, would be waived.
A spokesperson said that the waiver covers all loans disbursed by the PSCFC up to the fixed date, offering relief to Scheduled Caste and Divyangjan (persons with disabilities) loanees. The move will benefit a total of 4,727 loanees. The Cabinet granted ex-post facto approval for the waiver of loans disbursed up to March 31, 2020, for loanees of the PSCFC, he said.
Hitting out at the previous govts, Mann alleged that these families were exploited as "vote banks" through false promises.
These loans, Mann explained, were taken for various small enterprises like ration shops, hardware stores, boutiques, and even for education. He added that beneficiaries couldn't repay due to unforeseen circumstances, such as the death of an earning family member or prolonged illness, and that the waiver would provide them significant relief.
CM Mann stated that the loan waiver was a fulfilment of a promise made in the State Budget 2025-26.
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He noted that the corporation, established in 1971, has provided over Rs 847 crore in low-interest loans to more than 5.50 lakh Scheduled Caste families to date. Mann added that many families petitioned the state govt, citing their inability to repay the loans due to a lack of funds.
Finance minister Harpal Singh Cheema stated these loans were pending for almost 20 years, with previous governments failing to address the families' requests for relief.
He noted that despite the corporation serving economically vulnerable families, it maintained a surprisingly high loan recovery rate of 84%. This, he highlighted, indicates that the enterprises started by these families are largely successful.
Mann also pointed to the cooperative bank in Dhuri, which boasts an almost 99% recovery rate, in stark contrast to the negative rates seen elsewhere.
All 4,727 cases (including 4,685 defaulting loanees and 42 regular loanees) will be covered under this loan waiver scheme.
"No Due Certificates" (NDCs) will be issued by the district managers of PSCFC. The full amount of Rs 67.84 crore, comprising principal, interest, and penal interest calculated as of April 30, 2025, will be reimbursed to the PSCFC by the state govt. The cut-off date for calculating the final interest amount will be the date on which the govt issues the notification to implement the scheme," a source said.
With the implementation of this waiver, 4,727 poor SC and Divyangjan beneficiaries will receive relief amounting to Rs 67.84 crore — comprising Rs 30.02 crore in principal, Rs 22.95 crore in interest, and Rs 14.87 crore in penal interest (calculated up to April 30, 2025).
This initiative will help restore their dignity.
As per the 2011 Census, Scheduled Castes constitute 31.94% of Punjab's total population. Many members of this community have availed loans from PSCFC to establish self-employment ventures aimed at their economic upliftment. However, some borrowers have been unable to repay their loans due to circumstances beyond their control, leading to defaults, said the spokesperson.
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