Lok Sabha Question No. 1189 (UNSTARRED), answered on 2022-07-25
Subject: Loan to Farmers
Ministry: FINANCE
Asked by: Omprakash Bhupalsinh alias Pawan Rajenimbalkar, Bhavana Gawali (Patil), Krupal Balaji Tumane

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

## LOK SABHA

Answered on Monday, July 25,2022/Sravana 3, 1944(Saka)

## LOAN TO FARMERS

## +1189. SHRI OMPRAKASH BHUPALSINH ALIAS PAWAN RAJENIMBALKAR: SHRIMATI BHAVANA PUNDALIKRAO GAWALI: SHRI KRUPAL BALAJI TUMANE:

Will the Minister of FINANCE be pleased to state:

- a) whether the Government proposes to offer interest-free loans or loans at very nominal interest rates to the farmers across the country and if so, the details thereof;
2. (b) whether the Government proposes for declaration of loan waiver as done earlier;
3. (c) if the details thereof and ifnot; the reasons therefor; SO,
4. (d) the details of the measures taken on the lines of Loan Waiver o Loan Relief Schemes to address the agriculture crisis; and
5. (e) if s0, the details thereof and ifnot; the reasons therefor?

## Answer

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR BHAGWAT KARAD)

(a) to (e): With a view to ensure availability of agriculture credit at affordable the Government of India in the Department of Agriculture and Farmers' Welfare (DA&FW) is implementing an interest subvention scheme under which short term crop loans up to Rs. 3.00 lakh are provided at 7% per annum: additional interest subvention of 3% per annum is provided to farmers making timely repayment, thereby, reducing effective rate of interest to 4% per annum: This facility is also available to farmers engaged in Animal Husbandry & Fisheries farmers for working capital loan upto Rs. 2 lakh: rate, Also;

There is no proposal under consideration of the Union Government to waive off loans of farmers. However; the Government of India/ have inter-alia, taken the following major initiatives for welfare of farmers and to reduce their debt burden: RBI,

- 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 Rs. 1 lakh to Rs: 1.6 lakh;
- Reserve Bank of India (RBI) has issued directions for Relief Measures to be provided by respective lending institutions in areas affected by natural calamities which; inter alia, include restructuringhescheduling of existing crop loans and term loans, extending fresh designed that the moment calamity is declared by the concerned District Authorities, are automatically set in motion without any intervention; thus precious time. The benchmark for initiating relief measures by banks has been reduced from 50% to 33% loss in line with the National Disaster Management Framework. Banks have been advised not to insist for additional collateral security for restructured loans they saving crop
- In order to discourage distress sale by farmers and to encourage them instead to store their produce in warehouse, the benefit of interest subvention is available to small and marginal farmers having Kisan Credit Card (KCC) for & further period ofsix months post the harvest of the crop on the produce stored in warehouse accredited with Warehousing Development Regulatory Authority (WDRA) against negotiable warehouse receipts, at the same rate as is available on agriculture loan:
- Under the interest subvention  scheme, to provide relief to farmers affected by natural calamities, an interest subvention of 2% per annum is available to banks for the first year on the restructured loan amount Such restructured loans attract normal rate of interest from the second year onwards as per the extant policy laid down by the RBI
- To provide relief to the farmers affected due to severe natural  calamities, an interest subvention of 2% per annum is available to banks for first three years/entire period (subject to maximum of five years) on the restructured loan amount: Further, in all such cases, the benefit of prompt repayment incentive 3% per annum shall also be provided to the affected farmers.
- To small, marginal, tenant farmers, oral lessees, etc. into the fold ofinstitutional credit, Joint Liability Groups (JLGs) have been promoted by banks: bring
- 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 Rs. 6,000 per year is transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each: being

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