The Reserve Bank of India has formally given its approval for rescheduling of crop loans in four districts affected by heavy rains and Phailin cyclone in 2013 thus only partly conceding the request of Andhra Pradesh government.
As against the State government’s request for rescheduling of short term agricultural loans including loans against pledge of gold ornaments in the notified 575 mandals in 12 districts affected by drought and cyclone, RBI, it is understood, gave its approval to reschedule the loans only in four affected districts of Srikakulam, Vizianagaam, Nellore and Krishna districts. The quantum of crop loans availed by farmers in these districts is about Rs.5,000 crore.
The government was banking on RBI’s approval for rescheduling of crop loans to the tune of Rs. 10,000 crore to 12,000 crore in the 575 affected mandals as against the outstanding crop loans of Rs.25,000 crore. It hoped if the RBI approved the reschedule of loans in all the affected mandals, it would give some relief for it to implement the loan waiver of about Rs.45,000 crore to farmers, DWCRA groups and others.
The present quantum of crop loan reschedule also did not come easily as the RBI which sought the details of crop damage in the affected mandals raised many queries related to crop yields, deposits in accounts of farmers and pointed out that the yields did not indicate any distress in the farming sector.
The State government wrote a detailed letter on July 4 justifying the need for crop loan rescheduling and cited various other factors such as consecutive years of natural calamities, rising input costs, lack of remunerative prices that drained the farmers financially and drove thousands of them to commit suicides. In its response, the RBI apparently relented to reschedule crop loans only in four districts- Srikakulam,Vizianagaram, Nellore and Krishna districts.
But significantly Nellore district did not figure in the list of affected districts notified by the previous government.
The RBI also believed to have made it clear in its communication that it would reschedule only pure crop loans and not gold loans, ie those availed against pledging gold.
The government in its recent letter made a case that all gold loans taken from the banks were for agriculture purpose and the banks also treated them on par with crop loans for meeting their priority sector lending. The fact that gold loans for agriculture purpose were allowed interest subvention from Union Government should also be considered by the RBI, the State Government argued.
