The new government scheme to bear the interest portion on crop loans, a scheme aimed at favouring the farmers, might well end up with quite a quantum of unhappy farmers.
The Chief Minister N. Kiran Kumar Reddy announced recently that the farmers need not pay interest on crop loans as the government had decided to bear it provided the farmers repay the loans within a year.
Meanwhile, new directions pertaining to the scheme and its implementation have just been sent to all the banks, which has left many a banker confused on how to wriggle out of the new situation.
Close to six lakh farmers are given crop loans in the district under Kisan Credit Card Scheme where interest of seven per cent is levied by the banks. If a farmer pays back the crop loan or renews the account within a year of taking the loan, the Central government provides an interest subvention of three per cent. Meanwhile, the Government of Andhra Pradesh had taken on itself to bear the remaining four per cent after the Central government’s interest subvention under similar conditions, but has given the guidelines only a few days ago pertaining to settling of claims for the uncharged interest by the respective banks.
“As per the directions sent to the bankers, the AP government shall bear the remaining portion of the interest for all those promptly paying farmers who have paid back their loans or renewed it since the start of the financial year. But the catch here is that the directions only speak of those loans which turn one year old in April, while leaving in balance all those loans cleared before April,” said a banker in the know of the issue. Taking into consideration all those farmers who had taken loans during last rabi in the district, which translates to around 1.75 lakh farmers, the disgruntled lot might well be close to a lakh farmers if the directions issued by the State government as per the new scheme were to stay unmodified. Close to 1.75 lakh farmers take to crops in around 1.6 lakh hectares during rabi primarily under the Tunga Bhadra High Level Canal.