Lok Sabha Question No. 4113 (UNSTARRED), answered on 2018-08-10
Subject: Loan from Banks
Ministry: FINANCE
Asked by: SHIVKUMAR CHANABASAPPA UDASI

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

Unstarred Question No. 4113

To be answered on Friday, August 10, 2018/Shravana 19, 1940 (Saka)

## Loan from Banks

4113. SHRI SHIVKUMAR UDASI:

Will the Minister of FINANCE be pleased to state:

- (a) the total number of farmers in the country so far that have availed loans from Public Sector Banks and other Government agencies and are unable to pay it back;
- (b) whether the Government has waived off the loans of farmers and if so, the details thereof along with the number of loans and the quantum of loans that have been waived off, State/UT-wise;
- (c) if not, the reasons therefor;
- (d) whether the Government has provided loans to states for waiving off loans of farmers and if so, the details thereof, State/UT-wise; and
- (e) if not, the reasons therefor?

## Answer

The Minister of State in theMinistry of Finance (Shri Shiv Pratap Shukla )

- (a)  to  (e):  National  Bank  for  Agriculture  and  Rural  Development  (NABARD)  and  Reserve  Bank  of India (RBI) have reported that the data on the total number of farmers in the country having availed loans  from  PSBs  and  other  Government  agencies  and  unable  to  pay  it  back,  is  not  centrally maintained.  The Total agriculture credit provided by banks during the last three years, as reported by NABARD, is as under:

(Rs. in crore)

| Year     | Total Agriculture Credit Disbursment   |
|----------|----------------------------------------|
| 2015-16  | 9,15,509.92                            |
| 2016-17  | 10,65,755.67                           |
| 2017-18* | 11,68,502.84                           |

Source: NABARD (*provisional)

At  present  there  is  no  Loan  waiver  scheme  under  implementation  by  the  Union  Government.  As informed by NABARD, since 2014, various State Governments have announced their own schemes, inter  alia,  for  loan  waiver  of  farmers.  However,  no  financial  assistance  for  loan  waiver  has  been provided by the Union Government to State in this regard.

The Government has taken the following major initiatives to reduce the debt burden of farmers and for development of agriculture and welfare of farmers:

-  With a view to ensure availability of agriculture credit at a reduced interest rate of 7% p.a. to the  farmers,  the  Government  of  India  in  the  Department  of  Agriculture  Cooperation  and  Farmers' Welfare implements an interest subvention scheme for short term crop loans up to Rs. 3.00 lakh. The scheme  provides  interest  subvention  of  2%  per  annum  to  Banks  on  use  of  their  own  resources. Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.
-  RBI has issued master directions on relief measures to be provided by lending institutions in areas  affected  by  natural  calamities  including  drought  which,  inter  alia,  include  identification  of beneficiaries, extending fresh loans and restructuring of existing loans, relaxed security and margin norms, moratorium, etc.   The benchmark for restructuring of loans has been reduced from 50% to 33% crop loss, in line with the National Disaster Management Framework.
-  In  addition,  Loan  to  distressed  farmers  indebted  to  non-institutional  lenders  is  an  eligible category of farm credit under the Priority Sector Lending (PSL) as per directions issued by RBI.
-  Under  the  aforesaid  interest  subvention  scheme,  to  provide  relief  to  farmers  affected  by natural calamities, the interest subvention on crop loan continues to be available to banks for the first year on the restructured amount. Such restructured loans may attract normal rate of interest from the second year onwards as per policy laid down by the Reserve Bank of India (RBI).
-  RBI has conveyed to Banks to waive margin/ security requirements of agricultural loans upto Rs.1,00,000/-. The requirement of 'no due' certificate has also been dispensed with for small loans upto Rs.50,000/- to small and marginal farmers, share croppers and the like and, instead, only a selfdeclaration from the borrower is required.