Lok Sabha Question No. 7 (UNSTARRED), answered on 2020-02-03
Subject: Loans to Farmers
Ministry: FINANCE
Asked by: Omprakash Bhupalsinh alias Pawan Rajenimbalkar, S.R. Parthiban, Sanjay Haribhau Jadhav

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

## LOK SABHA

Unstarred Question No. †7

Answered on Monday, February 3, 2020/Magha 14, 1941 (Saka)

## LOANS TO FARMERS

†7: SHRI OMPRAKASH BHUPALSINH ALIAS PAWAN RAJENIMBALKAR:

SHRI PARTHIBAN S.R.:

SHRI SANJAY JADHAV:

Will the Minister of FINANCE be pleased to state:

- (a)  the  details  of  the  number  of  farmers  who  have  been  provided  loans  by  the  banks  for  various agricultural implements including tractors in the country during each of the last three years, State-wise;
- (b) whether the banks reject agricultural loan applications being submitted by the farmers by listing various reasons and if so, the details thereof;
- (c) whether the Government has made any effort to find out the reasons as to why the banks are not rightfully discharging their duties and if so, the details thereof;
- (d) whether private agencies are being given the responsibility for recovery of debt by banks and if so, the details thereof, State-wise including Maharashtra; and
- (e) the steps taken by the Government to meet the financial requirements of farmers in the country?

## Answer

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a):  The  number  of  accounts  in  which  agricultural  term  loans  which  inter  alia  includes  purchase  of agricultural implements such as tractors and machinery were provided by banks during the last three years, are as under:

(Rs. in crore)

| Year    | No. of accounts in which agricultural term loans (investment credit) was disbursed by banks   |
|---------|-----------------------------------------------------------------------------------------------|
| 2016-17 | 2,10,08,411                                                                                   |
| 2017-18 | 2,25,03,392                                                                                   |
| 2018-19 | 3,19,62,255                                                                                   |

(Source: NABARD)

Separate  data  on  bank  loans  for  financing  of  agricultural  implements  including  tractors  is  not maintained by Reserve Bank of India (RBI) and NABARD.

Details  of  state-wise  disbursement  of  term  loan  during  the  last  three  years  by  Commercial  Banks, Regional Rural Banks and Cooperative Banks, as reported by National Bank for Agriculture and Rural Development (NABARD), are provided in the Annexure to this reply.

- (b)  &  (c):  While  the  target  for  agriculture  credit  fixed  by  the  Government  has  been  surpassed each year, agriculture loans to farmers have also witnessed an increase over the years, which is indicative of progressive enhancement in the credit flow to the farm sector over time.

The  Government  has  launched  a  Centralised  Public  Grievance  Redress  and  Monitoring  System (CPGRAMS) portal which provides the citizens with a platform for redress of their grievances. Banks ensure speedy redressal of complaints received by them directly as well as through the CPGRAMS portal.

Also, complaints in regard to various issues relating to agriculture credit received by Government/RBI are taken up for appropriate redressal.

(d):  As  per  RBI  guidelines,  banks  are  required  to have  a loan  recovery  policy,  duly  vetted  by  their Boards, that prescribe the manner of recovery of dues, period-wise targeted level of reduction in nonperforming assets, etc. A number of recovery mechanisms are available to banks to effect recovery, such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in  the  National  Company  Law  Tribunal  under the Insolvency and  Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of non-performing assets. Banks decide upon the best possible recovery mechanism to be adopted in individual cases depending on the merits of each case

- (e):  The  Government/RBI  has  taken  the  following  initiatives  to  meet  the  financial  requirement  of farmers::
- The  Priority  Sector  Lending  (PSL)  directions  of  RBI  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 including loans to farmers. Further, a sub-target of 8% for small and marginal farmers has also been fixed.
- Government of India implements an interest subvention scheme under which short term crop loans up to ` 3.00 lakh are provided to farmers at a reduced interest rate of 7% p.a.  Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.
- The Government has introduced the Kisan Credit Card (KCC) Scheme, which enables farmers to  purchase agricultural inputs such as seeds, fertilisers, pesticides, etc. and draw cash to meet their agricultural and consumption needs. The KCC Scheme has since been simplified with facilities like one-time documentation, built-in cost escalation in the limit and facility of ATM enabled debit card etc.
- Under the KCC Scheme, a flexible limit of ` 10,000 to ` 50,000 has been provided to marginal farmers (as Flexi KCC), based on the land holding and crops grown including post harvest warehouse storage related credit needs and other farm expenses, consumption needs, etc., plus small term loan investments without relating it to the value of land.
- The benefits of KCC along with interest subvention have been extended to Animal Husbandry and Fisheries farmers.
- To  enhance  coverage  of  small  and  marginal  farmers  in  the  formal  credit  system,  RBI  has decided to raise the limit for collateral-free agriculture loans from ` 1 lakh to ` 1.6 lakh.
- The  requirement  of  'no  due'  certificate  has  also  been  dispensed  with  for  small  loans  up  to ` 50,000 to small and marginal farmers, share-croppers and the like and, instead, only a self-declaration from the borrower is required
- To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme has been implemented to provide an assured income support to all farmers, irrespective of the size of their land holdings subject to the exclusion  factor.  Under  this  scheme  direct  income  support  @  of ` 6,000  per  year  is  be  transferred directly into the bank accounts of beneficiary farmers, in three equal installments of ` 2,000 each.

******

## Annexure as referred to in part (a) of the reply to Lok Sabha Unstarred Question No. † 7 for 03.02.2020

Term loan disbursement during the last three years by Commercial Banks, Regional Rural Banks and Cooperative Banks

(Rs. in crore)

| S.No.   | State/UT          |   2016-17 |   2017-18 |   2018-19 |
|---------|-------------------|-----------|-----------|-----------|
| 1       | DELHI             |  11564    |  12988.5  |  22541.1  |
| 2       | HARYANA           |  13206.2  |  16546.6  |  21973.3  |
| 3       | HIMACHAL PRADESH  |   1696.61 |   3432.76 |   2324.37 |
| 4       | JAMMU &KASHMIR    |    594.44 |   2055.06 |   2584.54 |
| 5       | PUNJAB            |  16267.2  |  20191.4  |  23295.7  |
| 6       | RAJASTHAN         |  16428.3  |  17331.1  |  21572.4  |
| 7       | CHANDIGARH UT     |    653.16 |   1063.95 |   1582.82 |
| 8       | ARUNACHAL PRADESH |    104.81 |     55    |     30.6  |
| 9       | ASSAM             |   4533.88 |   5248.38 |   6021.17 |
| 10      | MANIPUR           |    192.13 |    217.82 |    209.97 |
| 11      | MEGHALAYA         |     86.61 |     64.11 |     60.81 |
| 12      | MIZORAM           |     84    |    151.69 |    345.53 |
| 13      | NAGALAND          |     56.49 |    122.38 |    126.19 |
| 14      | SIKKIM            |     53.72 |     59.22 |     99.4  |
| 15      | TRIPURA           |   1178.05 |   1620.98 |   2233.29 |
| 16      | A &NISLAND        |     99.01 |     78.18 |     98.29 |
| 17      | BIHAR             |  11966    |  14777.8  |  16226    |
| 18      | JHARKHAND         |   1558.59 |   1678.4  |   2217.17 |
| 19      | ODISHA            |   5453.32 |   7121.04 |   9990.83 |
| 20      | WEST BENGAL       |  21951.8  |  26024.3  |  33677.7  |
| 21      | CHHATTISGARH      |   2873.92 |   4294.75 |   3972.96 |
| 22      | MADHYA PRADESH    |  13239.2  |  14119.2  |  17298.8  |
| 23      | UTTARAKHAND       |   2834.26 |   3183.81 |   4973.85 |
| 24      | UTTAR PRADESH     |  21991.3  |  22535.6  |  27936.7  |
| 25      | GOA               |    792.43 |    898.97 |    990    |
| 26      | GUJARAT           |  20412.2  |  22907.5  |  26141.5  |
| 27      | MAHARASHTRA       |  40045    |  45107.4  |  54354.5  |
| 28      | D &NHAVELI UT     |     53.04 |     52.8  |     51.15 |
| 29      | DAMAN&DIU UT      |     21.79 |     21.1  |     33.99 |
| 30      | ANDHRA PRADESH    |  31477.1  |  33664.7  |  40384.1  |
| 31      | TELANGANA         |  20596.1  |  13870.5  |  30226.1  |
| 32      | KARNATAKA         |  36405.6  |  34997.9  |  35092.9  |
| 33      | KERALA            |  23323.1  |  29417.1  |  32257.2  |
| 34      | PUDUCHERRY        |   1951.52 |    760.35 |    624.4  |
| 35      | TAMILNADU         |  52550.7  |  52737.7  |  62835.3  |
| 36      | LAKSHADWEEP UT    |      2.72 |      4.55 |      1.52 |
| TOTAL   | TOTAL             | 376298    | 409403    | 504386    |

Source: NABARD