Lok Sabha Question No. 99 (UNSTARRED), answered on 2018-12-11
Subject: Loan Waiver Scheme for Farmers
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: KRUPAL BALAJI TUMANE

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO. 99

TO BE ANSWERED ON THE 11 TH  DECEMBER, 2018

## LOAN WAIVER SCHEME FOR FARMERS

99. SHRI  KRUPAL  BALAJI TUMANE:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) the  details  of  the  existing  loan waiver scheme for farmers of Maharashtra at  present;
- (b) the amount released by the Union Government under loan waiver scheme for farmers  of Maharashtra  along  with  the details thereof;
- (c) whether the State Government of Maharashtra  has  sent  any  proposal regarding any such assistance;
- (d) if  so,  the  reaction  of  the  Union Government in this regard;
- (e) whether  cases  of  suicide  by  the farmers of Maharashtra have come to the notice of the Union Government; and
- (f) if so, the efforts being made by the Government to check it?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI  PARSHOTTAM  RUPALA)

- (a): Post  Agriculture  Debt  Waiver  and  Debt  Relief  Scheme,  2008  no  other  debt  waiver scheme is under consideration of Union Government. However, the Government of Maharashtra had  announced Debt Waiver Scheme for farmers -Chhatrapati Shivaji  Maharaj Shetkari Sanman Yojna - and issued a Government Resolution dated 28 June 2017.

The scheme had three components viz. (i) Debt waiver upto Rs. 1.5 lakh, (ii) One time settlement for overdues above Rs. 1.5 lakhs wherein the farmers had to repay amount above Rs. 1.5 lakh first and (iii) Incentive for those farmers who had repaid their loans subject to a maximum of Rs. 25,000/-.

The salient features of the debt waiver scheme of Maharashtra are given below:-

-  The scheme initially covered farmers, who had taken Crop Loan and Medium Term loan on  or  after  01.04.2012.  Subsequently,  vide  various  amendments,  farmers  whose  loan has  been  due  from  the  year  2001  and  who  were  not  covered  under  the  loan  waiver schemes of 2008 and 2009 and whose loans were overdue as on 31 st July 2017, were also covered under the scheme.

-  The monetary ceiling for debt waiver was Rs.1.5 Lakh (principal + interest). The entire overdue loan was to be waived. The farmers whose overdue loan was more than Rs.1.5 lakh, were given the option of one time settlement, however, such farmers were required to repay first the loan amount over and above Rs.1.5 lakh to get the benefit of Rs.1.5 lakh from the State Government.
-  The  State  Government  had  also  announced  incentive  for  regular  borrowers.  Farmers who had repaid their crop loan availed during 2015-16 before 30.06.2016 and those who repay Crop loan availed during 2016-17 by 31.07.2017 were eligible to get the incentive. The  incentive  was  25%  of  repaid  loan  amount  or  Rs.25000,  whichever  is  less.  The minimum incentive amount is Rs.15000/.
-  Farmers whose loans were restructured during the period 2012-13 to 2015-16 and the loan  was  overdue  as  on  30.06.2016  were  to  get  benefit  of  the  above  scheme.  Those farmers who don't have overdue loan will get benefit of Rs.25000.

(b) to (d): No  proposal  from the State  Government  of  Maharashtra  seeking  financial assistance  on  account  of  its  loan  waiver  scheme  has  been  received  by  the  Department  of Expenditure, Ministry of Finance.

(e): Yes, Madam. The National Crime Records Bureau (NCRB), under the Ministry of Home Affairs  compiles  and  disseminates  information  on  suicides,  in  its  publication  titled  'Accidental Deaths and Suicides in India' (ADSI). These Reports on suicides are available upto 2015 on its website. The Reports for the year 2016 onwards have not been published yet. As per Report of 2015, 'Bankruptcy or Indebtedness' and 'Farming Related Issues' are reported as major causes of suicides among farmers/ cultivators. Other prominent causes of farmers/ cultivators suicides are family problems, illness, etc.

(f): With regard to debt relief to the families of the farmers who committed suicide due to debt,  if  any,  extended  by  various  State  Governments  is  centrally  not  available.  However,  to reduce the debt burden of farmers and to increase availability of institutional credit to farmers, following major initiatives have been taken by the Union Government:-

-  With  a  view  to  ensuring  availability  of  agriculture  credit  at  a  reduced  interest  rate  to farmers,  the  Government  is  implementing  the  Interest  Subvention  Scheme  (ISS)  since 2006-07. The Scheme is continued in 2018-19. Under ISS, short-term crop loans upto Rs.3 lakh per annum is provided to farmers at subvented interest rate of 7% against the normal lending rate of 9% p.a. which in case of prompt repayment by the farmers, gets reduced  to  4%.    Thus,  the  prompt  payee  farmers  are  getting  benefit  of  an  interest subvention of 5% per annum. The scheme is continued in 2018-19.  Besides, some State Governments in fact  also  provide  additional  interest  subvention,  reducing  the  effective interest burden on short term crop loans to zero.
-  Government sets annual target for the flow of credit to the agriculture sector. Banks have been consistently surpassing the annual target. The current year's agriculture credit flow target has been set at Rs.11 lakh  crore.
-  Reserve Bank of India (RBI) has issued Priority Sector Lending Guidelines (PSL), which 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.

-  As per PSL guidelines, loans to distressed farmers to repay non-institutional lenders are eligible under priority sector. Besides loans to stressed persons (other than farmers) not exceeding Rs.1,00,000/- per borrower to repay their debt to non-institutional lender are also eligible for the purpose of priority sector lending by banks.
-  In order to ensure that all eligible farmers are provided with hassle-free and timely credit for their agricultural operations, the Government is implementing 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 one-time 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. The Government also promotes  formation  of  Farmer  Producer  Organisations  (FPOs)  in  a  big  way  to  enable farmers  to  leverage  economies  of  scale,  not  only  for  agricultural  inputs  but  also  for enhanced marketing opportunities.
-  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.

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