Lok Sabha Question No. 1037 (UNSTARRED), answered on 2017-07-21
Subject: Interest Subvention Scheme
Ministry: FINANCE
Asked by: SANJAY SHAMRAO DHOTRE, KAVITHA KALVAKUNTLA, DODDAALAHALLI KEMPEGOWDA SURESH, B.N. CHANDRAPPA, (ADV.) JOICE GEORGE, SATYA PAL SINGH, RAMSINH PATALYABHAI RATHWA, NALIN KUMAR KATEEL, ARJUNLAL MEENA

Government of India Ministry of Finance Department of Financial Services

## LOK SABHA Unstarred Question No. 1037 To be answered on Friday, July 21, 2017/Ashadha 30, 1939 (Saka) Interest Subvention Scheme

1037. SHRI SANJAY DHOTRE: SHRI D.K. SURESH: ADV. JOICE GEORGE: SHRI RAMSINH RATHWA: SHRI ARJUN LAL MEENA:

SHRIMATI KAVITHA KALVAKUNTLA: SHRI B.N. CHANDRAPPA: DR. SATYAPAL SINGH: SHRI NALIN KUMAR KATEEL:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  a  large  number  of  farmers  availed  crop  loans  from  Nationalised  Banks  and  if  so  the details thereof during the last three years;
- (b)  whether  the  Government  has  continued  Interest  Subvention  Scheme  (ISS)  on  short  term  crop loans for farmers and if so, the details thereof along with the number of farmers likely to be benefited from the scheme State/UT-wise including Karnataka;
- (c) whether the Government has approved the ISS for farmers for the year 2017-18, if so, the details thereof along with the fund allocated, item-wise;
- (d) whether the Government has received demand from farmers across the country to waive off the crop loans and if so, the details thereof and action taken thereon; and
- (e)  whether  the  State  Governments  have  requested  the  Union  Government  to  provide  substantial interest subvention on crop loans to motivate the commercial/ Regional Rural Banks to increase their share in crop loan dispensation and if so, the details thereof?

## Answer

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

- (a):  The  details  of  farmers  having  availed  loans  from  Nationalised  Banks  in  the  last  three  years  as reported by Reserve Bank of India (RBI) are as under:

## (No. of accounts in  absolute terms & Amount in Rs. Thousand)

| 2014-15      | 2014-15             | 2015-16         | 2015-16          | 2016-17         | 2016-17          |
|--------------|---------------------|-----------------|------------------|-----------------|------------------|
| No. Accounts | of Amount Disbursed | No. of Accounts | Amount Disbursed | No. of Accounts | Amount Disbursed |
| 16568800     | 1760259820          | 19977043        | 2049715400       | 20561569        | 2336273722.98    |

(b) & (c): Government in the Department of Agriculture, Cooperation and Farmers' Welfare (DAC&FW) has approved the continuation of the Interest Subvention Scheme for the current financial year 201718.  Under  the  Scheme,  interest  subvention  of  2%  per  annum  is  provided  to  Public  Sector  Banks, Private Sector Scheduled Commercial Banks (in respect of loans given by their rural and semi urban branches only), Cooperative Banks and Regional Rural Banks on their own funds used for short term crop loans upto Rs. 3.00 lakh per farmer provided the lending institutions make available short term credit at the ground level at 7% per annum to farmers. Farmers are provided with 3% additional interest subvention for the short term crop loan of upto Rs. 3.00 lakh for a maximum period of one year for prompt repayment on or before the due date. Thus, farmers, who promptly repay their crop loans as per the repayment schedule fixed by the banks, are extended loans at an effective interest rate of 4% per annum.

Under the scheme, an amount of Rs. 15,000 crore has been allocated during 2017-18 and the breakup of the same is as under:

| S.N o.   | Title                                                             | Amount (in Rs. Crore)   |
|----------|-------------------------------------------------------------------|-------------------------|
| 1.       | Interest Subsidy for short Term Credit to Farmers                 | 10233                   |
| 2.       | Special Component Plan for Scheduled Castes                       | 2187                    |
| 3.       | Tribal Area Sub-Plan                                              | 1080                    |
|          | For North Eastern Area                                            |                         |
| 4.       | Interest Subsidy for Short Term Credit to Farmers                 | 1137                    |
| 5.       | Special Component Plan for Scheduled Castes Reserve Bank of India | 243                     |
| 6.       | Tribal Area Sub-Plan to Reserve Bank of India                     | 120                     |
|          | Total                                                             | 15,000                  |

- (d): There is no proposal under consideration of the Union Government to waive off loans of farmers. However, to reduce the debt burden of farmers, the following major initiatives have been taken:
-  The Government of India implements an interest subvention scheme for short term crop loans, as per details given in reply to part (b) & (c) of this Question.
-  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.
- (e): No such proposal from any of the State Governments has been received in DAC&FW.