Thousands of farmers await renewal of crop loans

With the kharif operations of agriculture set to begin in a fortnight, the bank accounts of thousands of farmers who took crop loans expecting the State government to implement in full its promise of loan waiver up to ₹ 1 lakh were kept on hold for non-payment.

The government had announced the loan waiver in 2018, when the State went to polls but the promise was so far, implemented in only two instalments - up to ₹25,000 in 2020 and ₹25,000 to ₹37,000 in August 2021.

There were a total of 36.68 lakh farmers eligible for loan waiver up to ₹ 1 lakh but only 5.66 lakh farmers qualified for fresh loans after the government credited their accounts up to ₹37,000.

The RBI rules regulate that crop loans be cleared in three seasons from the time of credit offtake to be eligible for renewal of accounts. The government allotted ₹20,164.20 crore in its annual budgets since 2018 but released only ₹1,171.38 crore in two instalments - ₹408.38 crore up to ₹25,000 and ₹763 crore from ₹25,000 to ₹37,000.

The government was required to credit to the bank accounts of farmers another ₹18,000 odd crore if the loan waiver was to be implemented in toto to all the 36.68 lakh farmers, who had borrowed ₹19,168.38 crore up to ₹ 1 lakh.

Though the banks have already adjusted the investment support of ₹5,000 an acre per season under the Rythu Bandhu and PM Kisan Samman Nidhi Yojana grant of ₹2,000 to farmers’ accounts, they were required to clear the entire outstanding that accumulated since 2018 and even before, if they were to qualify for renewal of loans.

In this context, the government had asked the farmers to clear off their outstanding without waiting for it to release the amount. A number of farmers had availed this offer and paid up the banks but a large chunk of them continued to default on repayments, including borrowings prior to 2018.

The government had repeatedly urged banks at State Level Bankers Committee meetings not to stop the renewals of farmers whose loans were not waived fully but to no avail. But, banks had insisted on renewal of accounts only on repayment. This had driven many of them to go to moneylenders at high interest rates.

Our code of editorial values

  1. Comments will be moderated by The Hindu editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.

Printable version | May 22, 2022 9:19:14 pm |