Farm debt is once again emerging as a major political issue in Punjab, with the Bhagwant Mann government announcing a proposed One Time Settlement (OTS) policy. The policy, particularly for loans taken from cooperative banks and societies, comes at a politically significant time, less than a year before the 2027 state elections, putting farm debt back at the centre of Punjab’s rural politics in particular.
Whether the Mann government’s debt-settlement scheme will deliver the political impact that Captain Amarinder Singh’s promise generated in 2017 will depend on the details
It has also assured time-bound clearance of pending sugarcane dues from private mills and announced that the One Window One Payment system will be extended to private mills. The promise became a key weapon against the then SAD-BJP government and helped Congress mobilise the rural vote for returning to power after a decade. The Mann government’s announcement, however, is not a blanket loan waiver. A committee, with participation from political parties, will formulate the OTS policy and determine how outstanding loans are to be settled, as per the plan. The scale of relief, eligibility criteria and financial implications will become crucial in determining whether the announcement translates into meaningful relief for farmers or remains primarily a political commitment. Critics at the time argued the implementation fell short of the complete, unconditional, one-time waiver originally pledged during his election campaign. Mann’s OTS announcement came after farmer unions called off their protest at the Chandigarh-Mohali (Punjab) border following a written assurance from the government. The government has simultaneously sought to address other major farm concerns, promising that Punjab will continue to offer the highest sugarcane price in the country and initiating the process of fixing the price.
The AAP move also reminds of the Congress campaign of 2017, when Captain Amarinder Singh made farm loan waiver one of his biggest electoral promises. Amarinder Singh, as Congress chief minister, partially fulfilled his farm debt waiver promise by launching a phased scheme that cleared up to Rs 2 lakh in crop loans for small and marginal farmers owning up to 5 acres, eventually extending relief to landless laborers. The agreement also includes a special assembly session within a month on issues concerning Punjab’s water rights, provisions of the Punjab Reorganisation Act, the Dam Safety Act, and the Seed Bill 2025. Politically, whether the Mann government’s OTS can deliver the kind of political impact that Amarinder Singh’s farm loan waiver promise generated in 2017 will depend on the details and, crucially, how much actual debt relief reaches the farmer.
