Soon after forming the government, the CM had signed an order to waive farm loans of below Rs 2 lakh in the state.
A month later, the government has published lists of 53,30,000 lakh beneficiaries in their respective panchayats, who had taken loans from 25 national and cooperative banks.
The farm loan waiver is costing more than Rs 50,000 crore to the government exchequer.
BJP, which was planning to corner the Kamal Nath government on loan waiver to farmers ahead of the Lok Sabha election, is itself on a tight spot over Multi-crore loan scam issue.
While processing the debts owed by farmers to it, the Madhya Pradesh government has discovered a huge scam which the chief minister suspects might be worth Rs 1000 crore.
Chief Minister Kamal Nath has ordered a probe into the scam in the name of lending credit to farmers on zero percent interest during the previous BJP government.
The irregularities surfaced soon after the government began processing names of the beneficiaries for state government’s farmers’ loan waiver scheme at the panchayat level.
Several farmers across the state have protested over their names figuring in the list, saying they had not taken any loan nor do they have any outstanding payment with any bank.
Cooperatives minister Govind Singh said, “It’s a huge scam and we will get it investigated.”
In the last few years, cooperative bank employees had been fraudulently withdrawing money belonging to poor farmers. They were also taking benefits of the scheme and without the knowledge of the farmers. Still, their names figured in the list as defaulters.
The police on Friday arrested a former manager of Chinor Cooperative Bank, Gwalior Mukesh Mathur in connection with Rs 120-crore fake farm loan distribution scam.
When the local newspapers reported the matter and former Congress MLA Brijendra Tiwari from Gwalior raised the issue before Chief Minister Kamal Nath, the pressure mounted, and Gwalior police arrested Mathur.
In other districts such as Harda, Sehore, Dewas, Neemuch, Mandsaur and Indore too such cases have been reported.
Before the scam surfaced, the BJP had been accusing the government of hoodwinking farmers in the name of loan waiver. The scam has left the opposition party shame-faced and silence.