Lok Sabha Question No. 1137 (UNSTARRED), answered on 2017-07-21
Subject: Waiver of Farmer Loan
Ministry: FINANCE
Asked by: SATYA PAL SINGH, SANJAY SHAMRAO DHOTRE, AJAY (TENI) MISRA, TARIQ ANWAR, ANANT KUMAR DATTATREYA HEGDE, ANTO  ANTONY, JAYADEV GALLA, RODMAL NAGAR, VINOD KUMAR BOIANAPALLI, CHINTAMAN NAVSHA WANAGA, PREM SINGH CHANDUMAJRA, BALASUBRAMANIAM SENGUTTUVAN, PRATHAP SIMHA, K. KAMARAAJ, SHOBHA KARANDLAJE

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

LOK SABHA Unstarred Question No. 1137 To be answered on Friday, July 21, 2017/Ashadha 30, 1939 (Saka) Waiver of Farmer Loan

1137. DR. SATYAPAL SINGH: SHRI AJAY MISRA TENI: SHRI ANANTKUMAR HEGDE: SHRI JAYADEV GALLA: SHRI B. VINOD KUMAR: SHRI PRATHAP SIMHA: KUMARI SHOBHA KARANDLAJE:

SHRI SANJAY DHOTRE: SHRI TARIQ ANWAR: SHRI ANTO ANTONY: SHRI NAGAR RODMAL: ADV. CHINTAMAN NAVASHA SHRI B. SENGUTTUVAN:

WANAGA: PROF. PREM SINGH CHANDUMAJRA: DR. K. KAMARAJ:

Will the Minister of FINANCE be pleased to state:

(a)  whether  the  Government  has  received  requests  from  various  State  Governments  for  waiving  off/restructuring  and lower interest rates on farmer loans and if so, the details thereof;

(b) the details of agricultural loans waived off/restructured and number of farmers benefitted by the Government during each of the last three years and current year, bank and State and UT-wise;

(c) whether the Government has formulated any criteria/ policy with regard to loan waiver scheme and if so, the details thereof;

(d) the details of impact of such waiving off/restructuring of loans on the functioning of the banks in the country;

(e)  whether  the  responsibility  to  arrange  funds  for  the  waiver  of  farmer  loans  has  been  entrusted  upon  the  State Government and if so, the details thereof; and

(f) the steps taken/being taken by the Government to protect the interest of farmers in this regard?

## Answer

The Minister of State in the Ministry of Finance

(Shri  Santosh Kumar Gangwar)

(a)  to  (f):  Government  receives  references  on  various  issues  relating  to  agriculture  credit  from  State  Governments. However, there is no proposal under consideration of the Union Government to waive off loans of farmers of the country.

No debt waiver scheme for farmers was announced by the Central Government during the last three years. Towards reducing the debt burden of farmers and increase availability of institutional credit to farmers, following major initiatives have been taken:

-  With  a  view  to  ensuring  availability  of  agriculture  credit  at  a  reduced  interest  rate  of  7%  p.a.  to  farmers,  the Government  of  India  in  the  Department  of  Agriculture,  Cooperation  &  Farmers'  Welfare  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.
-  Government  sets  annual  target  for  the  flow  of  credit  to  the  agriculture  sector.  Banks  have  been  consistently surpassing the annual target.
-  In  order  to  ensure  that  all  eligible  farmers  are  provided  with  hassle-free  and  timely  credit  for  their  agricultural operations, the Government has introduced the Kisan Credit Card (KCC) Scheme, which enables them to draw cash to purchase  agricultural  inputs  such  as  seeds,  fertilisers,  pesticides  as  well  as  meet  other  agricultural  and  consumption needs. The KCC Scheme has since been simplified by providing the farmers with ATM enabled debit card based on onetime documentation and built-in cost escalation in the limit, etc.
-  To bring small, marginal, tenant farmers, oral lessees, etc.  into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
-  Banks have been advised by RBI to waive margin/security requirements of agricultural loans upto Rs.1,00,000/-, vide RBI's circular dated 18 th  June, 2010.
-  RBI has issued  directions for Relief Measures to be provided by respective lending institutions in areas affected by natural calamities which, inter alia, include, restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These directions have been so designed that the moment calamity is declared by the concerned District Authorities they are automatically set in motion without any intervention, thus saving precious time. The benchmark for initiating relief measures by banks has also been reduced to 33% crop loss in line with the National Disaster Management Framework.