The Andhra Pradesh Cabinet would decide on Wednesday the modalities to provide debt relief to farmers with the bankers agreeing “by and large” to its proposal to meet 20 per cent of the total outstanding by cash and the rest by way of “subsidy certificates.”
The State Government has decided to float Farmers Empowerment Corporation which would be infused with capital of Rs. 7,000 crore to implement the debt relief scheme.
A sub-committee constituted by the State Level Bankers Committee (SLBC) to look into the proposal communicated its decision to the government on Tuesday evening. Official sources told The Hindu that the bankers “by and large” accepted the government’s proposal and the details of the debt relief scheme needed to be worked out.
The modalities would be finalised at the Cabinet meeting, the sources added.
Earlier speaking at the 186 State-Level Bankers Committee meeting here, Andhra Pradesh Finance Minister Y. Ramakrishnudu appealed to banks to help the government in fulfilling its commitment for providing debt relief to farmers and women self-help groups.
The government on its part was prepared to extend whatever help needed by banks and called upon the latter to reciprocate.
Referring to the debt relief scheme, he said that comprehensive data has been sought from the banks as its main concern was to ensure that no deserving farmer was deprived of the benefit.
He said the SLBC convenor had informed that the data collection was nearing completion and the details would be handed over to the government shortly.
‘Improve lending in rabi’At the same time, those who borrowed unethically should not be rewarded. The Finance Minister wanted banks to improve lending in rabi as only 38 per cent of the target was met during kharif season.
Issue of waiversExecutive Director of Andhra Bank, S.K. Kalra said that bankers strongly believe that agriculture should be a profitable business and farmers should not be made to look at waivers.
Instead, they might be provided with necessary inputs, forward and backward linkages to make agriculture profitable. He said farmers were reluctant to repay/ renew crop loans and other agricultural term loans owing to debt waiver announced by the government.
The banks were unable to recycle the funds due to slippage of agri loans into NPAs which were on a high side.
“This aspect, apart from badly affecting the morale of the field staff is also resulting in higher provisioning and ultimately affecting the credit rating of the banks”, he added.
