Lok Sabha Question No. 2766 (UNSTARRED), answered on 2016-12-02
Subject: Loan to Agricultural Implements
Ministry: FINANCE
Asked by: ASHOK MAHADEORAO NETE

## Government of India Ministry of Finance Department of Financial Services

## LOK SABHA Unstarred Question No. †2766

To be answered on December 02, 2016/Agrahayana 11, 1938 (Saka)

## Loan to Agricultural Implements

†2766. SHRI ASHOK MAHADEORAO NETE:

Will the Minister of FINANCE be pleased to state:

- (a)  the  number  of  farmers  provided  loans  by  the  banks  for  various  agricultural  implements  including tractors during the last three years and the current year, State-wise; and
- (b) the steps taken by the Government to meet the financial requirements of farmers?

## Answer

The Minister of State in the Ministry of Finance (Shri Santosh Kumar Gangwar)

- (a): As per the extant Directions on Priority Sector Lending issued by Reserve Bank of India (RBI), the medium  and  long-term  loans  to  farmers  for  agriculture  and  allied  activities,  which,  inter  alia,  include purchase  of  agricultural  implements  and  machinery  are  covered  under  eligible  activities  under  Priority Sector.The number of accounts in which agricultural term loans were provided by banks during the last three years and current year, are as under:

| Year                       | No. of accounts in which agricultural term loans (investment credit) was disbursed by banks   |
|----------------------------|-----------------------------------------------------------------------------------------------|
| 2013-14                    | 100.99 lakh                                                                                   |
| 2014-15                    | 112.16 lakh                                                                                   |
| 2015-16                    | 137.39 lakh                                                                                   |
| 2016-17 (up to 30.09.2016) | 119.39 lakh (provisional data )                                                               |

(Source: NABARD)

Separate data on bank loans for financing of agricultural implements including tractors is not maintained by RBI and National Bank for Agriculture & Rural Development (NABARD).

(b): Some of the major steps taken by the Government to meet the financial requirement of farmers are as under:

-  The Priority Sector Lending (PSL) directions of RBI mandate all Domestic Scheduled Commercial Banks to earmark 18% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance  Sheet  Exposure  (OBE),  whichever  is  higher,  as  on  the  corresponding  date  of  the previous year, for lending to Agriculture including loans to farmers. Further, a sub-target of 8% for small and marginal farmers has also been fixed.
-  Government has introduced the Kisan Credit Card (KCC) Scheme aimed at providing adequate and timely credit support from the banking system under a single window to the farmers for their cultivation & other needs, which enables them to draw cash to purchase agricultural inputs such as  seeds,  fertilizers,  pesticides,  etc.The  KCC  Scheme  has  been  simplified  further  w.e.f.  2012, which has provisions of ATM enabled debit card; loan for postharvest/consumption/householdrequirements and maintenance of farm assets; increase in validity of KCC to five years; built-in cost escalation in the limit; any number of drawals within the limit, etc.
-  With a view to ensuring availability of short term agriculture credit at a reduced interest rate of 7% p.a. to farmers, Government of India implements an Interest Subvention Scheme for short term crop loans up to Rs.3.00 lakh. Under the said scheme, additional subvention of 3% is given to those farmers who repay their short term crop loan in time, thereby reducing the effective rate of interest to 4% p.a. for such farmers.
-  To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
-  RBI has conveyed to Banks to waive margin and security requirements of agricultural loans upto Rs.1,00,000/-.