Lok Sabha Question No. 761 (UNSTARRED), answered on 2018-12-14
Subject: Debt Burdened Farmers
Ministry: FINANCE
Asked by: K.R.P. PRABAKARAN

## Government of India Ministry of Finance

## Department of Financial Services

## LOK SABHA

Unstarred Question No. 761

To be answered on Friday, December 14, 2018/Agrahayana 23, 1940 (Saka)

## Debt Burdened Farmers

## Question

## 761. SHRI K.R.P.PRABAKARAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the debt burden of farmers is higher than the average per capita income and if so, the details thereof along with the reasons for such high indebtedness of the farmers;
- (b) whether any assessment has been made with regard to the debt burden of the farmers  and  also  the  quantum  of  loans  taken  by  the  farmers  from  private  money lenders and if so, the details thereof during the last three years and the current year, State-wise;
- (c) whether the Government has any plan/package to bail out the indebted farmers and rescue them from the private money lenders; and
- (d) if so, the details thereof along with the steps taken by the Government to wipe out the debt burden of the farmers?

## Answer

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

(a) & (b): As per the provisional estimates of National Income for the financial year 2017-18 released by the Central Statistics  Office  (CSO),  Ministry  of  Statistics  and Programme Implementation, the per capita income at current prices during 2017-18 is  estimated  to  be  at  the  level  of  Rs.1,12,835.  National  Sample  Survey  Office (NSSO) conducted Situation Assessment Survey (SAS) of Agricultural Households during  NSS  70 th   round  (January,  2013-December  2013)  in  the  rural  areas  of  the country for the reference period of the agricultural year July 2012-June 2013. Based on  the  results  of  the  survey,  estimated  average  amount  of  outstanding  loan  per agricultural  household  as  on  date  of  the  Survey  was  Rs.47,000/-.  The  Survey estimated  that  at  all-India  level,  25.8  percent  of  the  loans  were  sourced  from 'agricultural/professional money lender'.  State-wise details are given at Annexure.

- (c) & (d): The Central Government has, inter alia, 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  (DAC&FW)  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%.   Further, in order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against warehouse receipts, the benefit of interest subvention scheme has been extended to small and marginal farmers having Kisan Credit Card for a further period of up to six months post-harvest on the same rate as

available  to  crop  loan  against  negotiable  warehouse  receipt  for  keeping  their produce  in  Warehouses  accredited  by  Warehousing  Development  Regulatory Authority (WDRA).

-  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).
-  Reserve  Bank  of  India  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. In addition, Loan to distressed farmers indebted to noninstitutional  lenders  is  an  eligible  category  of  farm  credit  under  the  Priority  Sector Lending (PSL) as per directions issued by RBI.
-  Pradhan Mantri Fasal Bima Yojana (PMFBY) provides a comprehensive insurance cover against failure of insured crops due to non-preventable natural risks, thus providing financial support to farmers suffering crop loss/ damage arising out of unforeseen events; stabilizing the income of farmers to ensure their continuance in farming; and  encouraging  them  to adopt innovative and  modern  agricultural practices.

 For  development  of  agriculture  and  welfare  of  farmers  of  the  country,  the Government in DAC&FW, is implementing various Central Sector/Centrally Sponsored Schemes, which include:

- (i) Rashtriya Krishi Vikas Yojana (RKVY)
- (ii) National Food Security Mission (NFSM)
- (iii) National Agriculture Market (e-NAM)
- (iv) National Mission For Sustainable Agriculture (NMSA)

## Annexure to Lok Sabh USQ 761 for 14.12.2018

## Details of Average outstanding Loan per agricultural households taken from

## 'Agricultural/ Professional Money lender'

| State                    | Approximate average amount of outstanding loan* per agricultural household (Rs)   | Average outstanding Loan per agricultural households taken from 'Agricultural/ Professional Money lender' (Rs)   |
|--------------------------|-----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|
| (1)                      | (2)                                                                               | (3)                                                                                                              |
| Andhra Pradesh           | 123400                                                                            | 61032                                                                                                            |
| Arunachal Pradesh        | 5400                                                                              | 299                                                                                                              |
| Assam                    | 3400                                                                              | 127                                                                                                              |
| Bihar                    | 16300                                                                             | 8360                                                                                                             |
| Chhattisgarh             | 10200                                                                             | 2375                                                                                                             |
| Gujarat                  | 38100                                                                             | 2498                                                                                                             |
| Haryana                  | 79000                                                                             | 16805                                                                                                            |
| Himachal Pradesh         | 28000                                                                             | 418                                                                                                              |
| Jammu & Kashmir          | 12200                                                                             | 386                                                                                                              |
| Jharkhand                | 5700                                                                              | 1477                                                                                                             |
| Karnataka                | 97200                                                                             | 20164                                                                                                            |
| Kerala                   | 213600                                                                            | 4775                                                                                                             |
| Madhya Pradesh           | 32100                                                                             | 7774                                                                                                             |
| Maharashtra              | 54700                                                                             | 2727                                                                                                             |
| Manipur                  | 6100                                                                              | 1211                                                                                                             |
| Meghalaya                | 1400                                                                              | 32                                                                                                               |
| Mizoram                  | 2900                                                                              | -@                                                                                                               |
| Nagaland                 | 600                                                                               | -@                                                                                                               |
| Odisha                   | 28200                                                                             | 2668                                                                                                             |
| Punjab                   | 119500                                                                            | 17924                                                                                                            |
| Rajasthan                | 70500                                                                             | 30921                                                                                                            |
| Sikkim                   | 9900                                                                              | -@                                                                                                               |
| Tamil Nadu               | 115900                                                                            | 29597                                                                                                            |
| Telangana                | 93500                                                                             | 56362                                                                                                            |
| Tripura                  | 5000                                                                              | 118                                                                                                              |
| Uttarakhand              | 35600                                                                             | 2299                                                                                                             |
| Uttar Pradesh            | 27300                                                                             | 6125                                                                                                             |
| West Bengal Group of UTs | 17800                                                                             | 3142 3339                                                                                                        |
| all-India                | 47700 47000                                                                       | 12130                                                                                                            |

* (i)    Information on loan included all kinds of outstanding loans irrespective of the purpose for which loans were taken. (ii)   Outstanding loan of the agricultural households as on the date of survey i.e; the day on which the data was collected from individual households @ Figures are negligible or with insufficient sample size

## Source : NSSO