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Tamil Nadu Debt Waiver Scheme: Supreme Court Said The Scheme Cannot Be Called Doubtful Just Because It Was Based On Election Promises

The Supreme Court on Tuesday upheld the scheme of waiving off loans issued by the Tamil Nadu government to small and marginal farmers in 2016. The top court has observed that a scheme cannot be constitutionally dubious merely because it was based on an election promise.

A bench of Justices DY Chandrachud and AS Bopanna observed that the objective of promoting the welfare of farmers as a class in order to secure economic and social justice is well recognized by Article-38 of the Constitution.

“The classification on the basis of extent of holding is not arbitrary as the inherent vulnerable condition of small and marginal farmers, the impact of climate change or other external forces are unequal,” the top court said.

Making these remarks, the apex court set aside the Madras High Court’s April 4, 2017 decision which had held arbitrary grant of loan waiver to only small and marginal farmers. The High Court had directed the state government to provide benefits to all farmers, irrespective of the extent of holding.

The Supreme Court said that the law or scheme of the government can be tested not on the basis of majority morality but only on constitutional morality. The bench also said that the scheme was brought in pursuance of an election promise made by the then ruling party of Tamil Nadu. “It is an established law that a scheme cannot be treated as constitutionally doubtful merely because it was based on an election promise,” the bench said.

The top court also pointed out the different problems faced by small and marginal farmers with less than five acres of land and those from the economically weaker sections of the society as compared to other farmers.

The Supreme Court said, ‘Small and marginal farmers belong to the economically weaker section of the society. Hence the loan waiver scheme effectively targets the economically weaker section of the rural population.

The bench also said that the purpose of providing farm loan waiver for farmers is to uplift distressed farmers as they are bearing the brunt of fall in prices due to uncertain weather, low yield and market conditions.

The court observed that 16,94,145 small and marginal farmers have availed the farm loan while 3,01,926 other category farmers have availed it. This shows that the small and marginal farmers are in acute shortage of capital as compared to the rest of the farmers.

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