Lok Sabha Question No. 1759 (UNSTARRED), answered on 2018-07-27
Subject: Crop/Farm Loans
Ministry: FINANCE
Asked by: KRISHNAN NARAYANASAMY RAMACHANDRAN, PR. SENTHILNATHAN, V. SATHYABAMA, SANKAR PRASAD DATTA, R.K. BHARATHI MOHAN

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

Unstarred Question No. 1759 To be answered on Friday, July 27, 2018/Shravana 5, 1940 (Saka)

## Crop/Farm Loans

## 1759. SHRI K.N. RAMACHANDRAN: SHRI PR. SENTHIL NATHAN: SHRIMATI V. SATHYA BAMA: SHRI SANKAR PRASAD DATTA: SHRI BHARATHI MOHAN R.K.:

Will the Minister of FINANCE be pleased to state:

- (a) the number of marginal and middle level farmer who have failed to pay back loans availed from banks and private/ financial institutions, State/UT-wise;
- (b) whether the Government has any proposal to waive off farm/crop loans borrowed from the banks or financial institutions by the farmers;
- (c) if so, the criteria adopted to shortlist whose loan would be waived off and if not, the reasons thereof;
- (d) the quantum of loan amount that would be considered for waiver; and
- (e) whether a large number of small, micro and marginal farmers, who availed loans from various Co-operative Banks, Public Sector Banks (PSBs) have incurred losses due to both demonetization and crop loss, if so, the details thereof and the corrective action taken by the Government in this regard?

## Answer

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

- (a):  Reserve  Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) have reported that the information/data regarding number of marginal and middle level farmers who failed to pay back loans taken from banks and private institutions, State/UT-wise is not maintained.
- (b)  to  (e)  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:
-  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%.
-  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.
-  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)

Post demonetisation, Government has taken the following relief measures for the farmers in the cooperative sector:

- (i) An  additional  grace  period  of  60  days  for  prompt  repayment  incentive  @  3%  was  provided  to  such farmers whose crop loans dues fell due between 01/11/2016 to 31/12/2016 and if such farmers repaid the same within 60 days from their due date in this period.
- (ii) Interest waiver for two months (November and December, 2016) for all short term crop loans availed from Cooperative Banks between 01.04.2016 to 30.09.2016 and upfront deposit of the same in the accounts of the concerned farmers.
- (iii) NABARD raised short term borrowings from the market at prevailing market rate of interest for ₹17,880.78 crore and disbursed the same under refinance for on-

lending to Cooperative Banks at 4.5% rate of interest during 2016-17.