Lok Sabha Question No. 360 (STARRED), answered on 2019-01-04
Subject: Statutory Debt Relief Commission
Ministry: FINANCE
Asked by: RAJU ALIAS DEVAPPA ANNA SHETTI

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

Starred Question No. †* 360

To be answered on Friday, January 4, 2019/Pausha 14, 1940 (Saka)

## Statutory Debt Relief Commission

†*360. SHRI RAJU SHETTY:

Will the Minister of FINANCE pleased to state:

- (a)  whether  the  Government  has  conducted  any  survey  to  find  out  the  amount  of loan taken by farmers from money lenders;
- (b) if so, the details thereof and if not, the reasons therefor;
- (c)  whether  the  Government  has  prepared  any  scheme/programme/set  up  any Statutory Debt Relief Commission to bring out the farmers from indebtedness and free them from the grip of money lenders and if so, the details thereof; and
- (d)  the  other  steps  taken/being  taken  by  the  Government  to  improve  the  banking services in rural areas?

Answer The Minister of Finance (Shri Arun Jaitley)

- (a) to (d) : A Statement is laid on the Table of the House.

Statement referred in reply to parts (a) to (d) of Lok Sabha Starred Question No.  †*360  to  be  answered  on  04.01.2019  regarding  Statutory  Debt  Relief Commission by SHRI RAJU SHETTY:

(a) & (b): National Sample Survey Office (NSSO) conducted Situation Assessment Survey  (SAS)  of  Agricultural  Households  during  NSS  70 th   round  (January,  2013December  2013)  in  the  rural  areas  of  the  country  for  the  reference  period  of  the agricultural year July 2012-June 2013. The Survey estimated that at all-India level, 25.8 percent of the loans were sourced from 'agricultural/professional money lender' for the reference period of the agricultural year July 2012-June 2013. The agriculture credit from institutional sources has increased from Rs. 6,07,376 crore in 2012-13 to Rs.  11,62,616.98  crore  (provisional)  in  2017-18,  as  reported  by  National  Bank  for Agriculture and Rural Development.

(c): There is no proposal under consideration of the Government for setting up of Statutory Debt Relief Commission. However, Government/ RBI has taken several measures to increase institutional credit flow and to bring more and more farmers, within  the  fold  of  institutional  credit.  These  measures,  inter  alia,  include  the following major steps to provide hassle free crop loan to farmers:-

-  Government fixes agriculture credit disbursement targets for the banking sector every  year  and  banks  have  consistently  surpassed  these  targets.  Agriculture credit target for the year 2018-19 has been fixed at Rs. 11 lakh crore.
-  As  per  RBI  directions,  Domestic  Scheduled  Commercial  Banks  are  required  to lend  18%  of  the  Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  to  OffBalance  Sheet  Exposure  (CEOBE),  whichever  is  higher,  towards  agriculture.  A sub-target  of  8%  is  also  prescribed  for  lending  to  small  and  marginal  farmers including landless agricultural labourers, tenant farmers, oral lessees and share croppers.
-  Loan  to  distressed  farmers  indebted  to  non-institutional  lenders  is  an  eligible category of farm credit under the Priority Sector Lending (PSL) as per directions issued by RBI
-  The  Government  has  introduced  the  Kisan  Credit  Card  (KCC)  Scheme,  which enables  farmers  to  meet  the  short  term  credit  requirements  for  cultivation  of crops; Post-harvest expenses; Produce marketing loan; Consumption requirements  of  farmer  household;  Working  capital  for  maintenance  of  farm assets  and  activities  allied  to  agriculture;  and  Investment  credit  requirement  for agriculture and allied activities. The KCC Scheme has since been simplified and provides for issue of ATM enabled RuPay debit card with, inter alia, facilities of one-time  documentation,  built-in  cost  escalation  in  the  limit,  any  number  of drawals within the limit, etc.
-  With a view to ensuring 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 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%.
-  RBI has conveyed to Banks to waive margin/security requirements of agricultural loans upto Rs.1,00,000/-.  The requirement of 'no due' certificate has also been dispensed with  for  small  loans  up  to  Rs.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.

(d): As  per  Reserve  Bank of  India's  (RBI)  extant guidelines on ' Rationalising the Branch  Authorisation  Policy'  dated  18.5.2017, general   permission   has   been granted   to  domestic  Scheduled  Commercial  Banks (SCBs)  (excluding Regional Rural  Banks) , to  open  banking outlets at any place in the country without seeking prior approval of RBI in each case , subject to at   least   25 percent   of   the   total number  of  banking outlets opened during a  financial year being in unbanked rural centres with population less than 10,000.

As apprised by RBI, as on 30.06.2018, out of total 1,42,857 branches  of Scheduled Commercial Banks (SCBs), 50,803 branches are in rural areas.

With  a  view  to  increase  banking  penetration,  promote  financial  inclusion  and  to provide  at  least  one  bank  account  per  household  across  the  country,  a  National Mission  on  FI  known  as  Pradhan  Mantri  Jan  Dhan  Yojana  (PMJDY)  is  being implemented  in   the  country  since  August  2014,  with  the  added  facility  of  RuPay debit card having in-built accident insurance cover as well as  overdraft facility. As on 26.12.2018,  out  of  total  33.66  crore  accounts  opened  under  PMJDY,  19.92  crore (59.18%) are in rural/ semi-urban areas.

To consolidate the gains made through financial inclusion initiatives implemented so far  and  deepen  it  further  to accelerate  the  participation  of  the  masses  in  the economic growth of the country,  PMJDY has been extended beyond 14.8.2018 with following modification:

-  Existing Over Draft (OD) limit of Rs. 5,000 revised to Rs. 10,000.
-  There will not be any conditions attached for OD upto Rs. 2,000.
-  Age limit for availing OD facility revised from 18-60 years to 18-65 years.
-  The accidental insurance cover for new RuPay card holders raised from existing Rs.1 lakh to Rs. 2 lakh to new PMJDY accounts opened after 28.8.2018.

For  opening  of  accounts  under  PMJDY,  the  focus  has  now  been  shifted  to  from 'every  household  to  every  adult',  with  added  emphasis  on  usage  of  accounts  by enhancing DBT flows through these accounts, adoption of social security schemes, promoting digital payments through the use of RuPay cards, etc.

Implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY) inter alia focussed on providing banking services in rural areas. To achieve this object, the villages were mapped into 1.59 lakh sub-service areas (SSA) of 1,000 to 1,500 households each. Out of these SSAs, 0.33 lakh are served by bank branches and 1.26 lakh are served by  BCs.  As  allowed  by  RBI,  scope  of  FI  has  been  further  widened  by  roping  in Common  Service  Centres  (CSCs),  Fair  Price  Shops  (FPS),  Self  Help  Group members, Gramin Dak Sewaks etc. as BCs to provide banking services throughout the country.