Lok Sabha Question No. 1497 (UNSTARRED), answered on 2019-07-01
Subject: Agriculture Credit Disbursement
Ministry: FINANCE
Asked by: Bheemrao Baswanthrao Patil

## 1497. SHRI B.B.PATIL:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Government  fixes  agriculture  credit  disbursement  targets  for  the  banking sector every year and if so, the details thereof;
- (b) whether the banks have consistently surpassed these targets of agriculture credit and if so, the details thereof;
- (c)  whether  the  Government has taken note that despite the target surpassed by banks, the eligible  small  and  marginal  farmers  are  being  denied  or  discouraged  by  bank  officials  to sanction loans to them; and
- (d)  if  so,  whether  the  Government has received any complaint in this regard and if so, the details thereof along with the action taken in this regard?

## Answer

The Finance Minister (Smt Nirmala Sitharaman)

- (a) and (b): Government fixes agriculture credit disbursement targets for the banking sector every year and banks have consistently surpassed these targets.

The details of agriculture credit targets fixed by the Government and the achievement by the Banks,  for  the  last  three  years  (2016-17  to  2018-19)  as  reported  by  National  Bank  for Agriculture and Rural Development (NABARD), are given as under:

( ` crore)

| Year    | Target    | Achievement   |   % achievement |
|---------|-----------|---------------|-----------------|
| 2016-17 | 9,00,000  | 10,65,755.67  |          118.42 |
| 2017-18 | 10,00,000 | 11,62,616.98  |          116.26 |
| 2018-19 | 11,00,000 | 12,54,762.20* |          114.06 |

## *provisional

(c) and (d): The details of total amount of loan disbursed to farmers and the share of Small and Marginal Farmers (SF/MF) therein during the last three years, as reported by NABARD, are as under:

( ` crore)

| Year    | Total Disbursed Amount   | Loan disbursed to SF/MF out of total disbursement   |   %share of SF/ MF in total amount disbursed |
|---------|--------------------------|-----------------------------------------------------|----------------------------------------------|
| 2016-17 | 10,65,755.67             | 5,34,351.43                                         |                                        50.14 |
| 2017-18 | 11,62,616.98             | 5,80,457.42                                         |                                        49.93 |
| 2018-19 | 12,54,762.20*            | 6,26,087.53*                                        |                                        49.9  |

The Government of India/ Reserve Bank of India (RBI)/ NABARD have, inter alia, taken the following major initiatives for providing hassle free crop loans to farmers including SF/MF :-

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

Unstarred Question No. 1497 To be answered on Monday, July 01, 2019/Ashadha 10, 1941 (Saka)

## Agriculture Credit Disbursement

-  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 implements an interest subvention scheme for short term crop loans up to ` 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%.
-  As per RBI directions, Domestic Scheduled Commercial Banks are required to lend 18% of the Adjusted Net Bank Credit (ANBC) or Credit Equivalent to Off-Balance 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. Similarly, in the case of Regional Rural Banks 18% of their total outstanding advances is required to be towards agriculture and a sub-target of 8% has been set for lending to small and marginal farmers.
-  Under the Kisan Credit Card (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.
-  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.