Increase loan size to ryots: Minister

Post-demonetisation, banks should shoulder more responsibility, says Minister

Planning ahead: Finance Minister Etala Rajender and Agriculture Minister Pocharam Srinivas Reddy with Chief Secretary S. P. Singh at the unveiling of the NABARD budget at the State Credit Seminar in Hyderabad on Friday.

Irrigation and Marketing Minister T. Harish Rao here on Friday exhorted the banking industry, including the Reserve Bank of India, National Bank for Agriculture and Rural Development (Nabard) and others to take more responsibility and come to the aid of the farmers, who were affected by demonetisation, this season.

“Despite taking bank loans farmers borrow from local moneylenders and others for agriculture activities, however, post-demonetisation this source has dried up. Therefore the banks should bridge this gap,” he urged at the Nabard’s State Credit Seminar held to discuss the credit plan for 2017-18.

Scale of funding

“Farmers take additional funding because the scale of loan is not sufficient. So, banks should consider scaling up the loan amount taking the real investment into picture. Timely sanction of loan is also crucial since it never happens when the farmer needs it. And, after demonetisation, 80 per cent lending has not happened as the banks were busy exchanging notes,” Mr. Rao observed.

The Minister also wanted Nabard to consider lending money to the marketing agencies like Markfed, HACA and others for ‘revolving fund’ for market intervention whenever prices crash on a bumper crop. By the time the Government intervenes opening credit facility it takes 15 days and the farmer is forced to sell to the middleman,” he pointed out, giving example of redgram and onions, among others.

Godowns

Mr. Rao thanked Nabard to sanctioning ₹1024 crore for constructing godowns and 200 of them (10 lakh sq.ft) were ready. Another 100 would be ready by March-end taking total space to 17 lakh sq.ft. The Centre too has sanctioned ₹250 crore grant for the work.

Earlier, Agriculture Minister P. Srinivas Reddy wanted the banks to help the Government in doubling the farmers income by raising the credit facility but the ultimate objective should be to make the farmers debt-free and deposit profits. Nabard has been instrumental in financing micro-irrigation and other schemes besides playing a big role in Mission Kakatiya and Mission Bhagiratha.

He reeled out various subsidies and schemes initiated by the Government to help the small and marginal farmers constituting 80 per cent. Chief Secretary S.P. Singh said the infrastructure and social plans underway could change profile of TS and credit needs would be 300 % more, especially with regard to animal husbandry and fisheries. Finance Minister Etala Rajender, RBI’s Regional Director R. Subramanium and others also spoke.

Credit Plan

Nabard has unveiled ₹65,590.61 crore credit plan estimates for 2017-18 to Telangana and this was 17% higher when compared to current year of 2016-17. The exercise has been carried out in the backdrop of declining growth rate of agriculture due to drought, Government initiatives in horticulture, animal husbandry and fisheries besides giving high priority to irrigation sector, said P. Radhakrishnan, chief general manager.

Credit demand is also likely to increase because of the reorganisation of districts. The impact of climate change and strategies for doubling of farmers income by 2022 are the other two dimensions taken into account in the credit planning exercise where the need to graduate towards a cashless society was outlined.

The credit potential has been estimated under the priority sector lending like crop loans – ₹32,830 crore, term loans – ₹14,117 crore, water resources – ₹762 crore, farm mechanisation – ₹2088 crore, plantation & horticulture – ₹ 815 crore, micro, small & medium enterprises – ₹ 9,241 crore and ₹ 9,402.37 crore to other activities.