Gujarat Farm Crisis: Agricultural Debt Crosses ₹74,000 Crore In Public Sector Banks

AHMEDABAD — Amid ambitious developmental claims and past political pledges to double agricultural incomes, Gujarat’s farming community is grappling with a steep debt burden. Figures submitted by the Union Ministry of Finance in the Lok Sabha reveal that outstanding agricultural loans owed by Gujarat’s farmers to public sector banks (PSBs) surged to ₹74,176.52 crore as of 31 March 2026.

The expanding debt pile places Gujarat 10th nationally in total outstanding farm credit exposure from public sector institutions, accounting for approximately 4.2 per cent of India’s overall public sector agricultural loan footprint.

Looming Debt Burden Across Western India

The data highlights that agricultural credit exposure remains heavy across western and central India. While Gujarat’s total outstanding farm loan figure of ₹74,176.52 crore is lower than neighbouring states like Rajasthan (₹88,599.32 crore) and Madhya Pradesh (₹79,353.97 crore), it significantly outpaces northern agrarian hubs such as Punjab (₹48,421.94 crore) and Haryana (₹39,786.04 crore).

Nationally, southern states report the largest volumes of public sector agricultural borrowing, with Tamil Nadu leading the list at ₹3,44,996.64 crore, followed by Andhra Pradesh at ₹2,69,415.73 crore.

Centre Rules Out Nationwide Debt Relief

The disclosure comes at a time when agricultural distress and debt relief demands remain at the centre of regional socio-political debates. Addressing queries regarding potential financial relief for stressed cultivators, the Ministry of Finance clarified that the Union government is not contemplating any proposal for a nationwide one-time farm loan waiver for small and marginal farmers.

Instead, the Centre pointed to the Reserve Bank of India’s (RBI) existing framework for stressed assets. Under these guidelines, commercial banks hold the discretion to restructure non-performing or delinquent agricultural loans based on their individual board-approved policies.

Distinguishing Credit Exposure From Default

Financial analysts and banking authorities note that the reported ₹74,176.52 crore represents total outstanding agricultural advances logged via NABARD portals, rather than immediate default figures. The Lok Sabha submission did not provide a granular breakdown of non-performing assets (NPAs), overdue accounts, or the precise distribution of debt between small, marginal, and large landholders.

With rising input costs, unpredictable weather patterns, and fluctuating crop prices squeezing profit margins, the massive debt footprint highlights the persistent financial pressures facing cultivators across Gujarat's agricultural heartland.