The farm loan waiver scheme is likely to burden the Telangana government by over Rs. 14,000 crore in the current financial year (2014-15) as the Reserve Bank of India (RBI) has given its informal approval only for rescheduling agriculture loans for a period of three years.
In Telangana, farmers have renewed loans (repaid dues) to the tune of about Rs. 5,000 crore out of Rs. 17,337 crore credit availed as crop and agriculture term loans during 2013-14, sources in the government said. Besides, the farmers had also availed another Rs. 1,800 crore loans for their farming needs by mortgaging their gold. In all, 39,07,409 farmers had availed credit for farming last year.
With the RBI giving its consent only to reschedule crop and agriculture term loans, informally for now, the State government is likely to get relief only for Rs. 5,000 crore. “The government has to meet from its internal sources the burden of loan waiver to the extent of over Rs. 14,000 crore (Rs. 12,337 crore for unpaid crop, agriculture term loans and Rs. 1,800 crore for gold loans) in the current financial year,” the sources explained.
The government has to repay the banks the rescheduled loans in the next two years so that the loan waiver scheme is also implemented to those farmers.
The government had to formally seek RBI nod to reschedule loans pertaining to farmers in 77 out of 414 rural mandals in Telangana as such request was made only in the case of 337 mandals so far. It would also reply to the RBI letter on rescheduling in a couple of days as the necessary details were already taken from SLBC, the sources said.
A majority of farmers who had availed crop and agriculture term loans during the 2013-14 have not repaid dues as TRS and TDP have promised to implement farm loan waiver scheme, if voted to power. The TRS government in Telangana and TDP government in Andhra Pradesh have suffered setback to their plans as the RBI had refused to give clearance for loan waiver scheme stating that it would have adverse impact on banks’ financial health. Instead, it offered to reschedule farm loans provided the two States explained ways and means to bear the burden.
