Lok Sabha Question No. 451 (UNSTARRED), answered on 2026-02-02
Subject: Debt Burden on Farmers and Small Traders
Ministry: FINANCE
Asked by: Shri Satpal Brahamchari, Shri Nalin Soren, Shri Jai Parkash

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO. 451

ANSWERED ON MONDAY, FEBRUARY 02, 2026/MAGHA 13, 1947 (SAKA)

## Debt Burden on Farmers and Small Traders

## †451. SHRI SATPAL BRAHAMCHARI: SHRI JAI PARKASH: SHRI NALIN SOREN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that debt burden on farmers, small traders and common families in Haryana and Jharkhand is continuously rising due to which they are getting trapped in debt trap, if so, the details thereof;
- (b) whether it is a fact that stringency or strictness in recovery of loans disbursed by banks and non-banking financial institutions and the increasing influence of informal moneylenders are creating social and economic problems, if so, the details thereof;
- (c) the  increase  in  total  agriculture,  MSME  and  personal  loans  in  Haryana  and  Dumka  in Jharkhand from 2019 till date;
- (d) whether any special scheme like interest subsidy, restructuring or debt counselling has been launched by the Government to provide relief from debt trap and if so, the details thereof; and
- (e) the action plan of the Government to enhance financial literacy and ensure disbursement of loans in the legitimate manner in the State?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (c) Government of India has taken several initiatives to facilitate access to formal and affordable institutional  credit,  thereby  helping  reduce  dependence  on  informal  sources  and easing  the  debt  burden  on  borrowers.  Such  credit  enables  borrowers  to  meet  capital expenditure, working capital, and essential personal needs, supporting livelihood enhancement and productivity. Further, credit is extended by financial institutions strictly as per eligibility, assessed  requirements,  and  informed  consent,  ensuring  responsible  lending  and  financial inclusion. Recovery of loans by banks is carried out in accordance with the guidelines issued by the Reserve Bank of India (RBI) and the policies approved by the respective Boards of banks.  As  informed  by  the  State  Level  Bankers'  Committees  (SLBCs)  of  Haryana  and Jharkhand, no instances of illegitimate recovery practices by banks have been reported.

The data pertaining to agriculture, MSME and personal loan outstanding since 2019 in the state of Haryana and Dumka district of Jharkhand is furnished in the Annexure .

(d) and (e)  The Government has taken several measures to reduce the debt burden of farmers majorly through promoting access to formal and affordable sources of finance which inter-alia include:

- Kisan Credit Card (KCC) provides farmers with timely and affordable credit for purchasing agricultural inputs such as seeds, fertilizers, and pesticides, as well as for meeting cash requirements related to crop production and allied activities. In 2019, KCC scheme was extended to cover working capital requirement of animal husbandry, dairying and fisheries.
- The Government of India's Modified Interest Subvention Scheme (MISS) offers short-term agricultural loans to farmers at a concessional interest rate of 7% through Kisan Credit Cards  (KCC),  with  banks  receiving  a  1.5%  interest  subvention.  Farmers  who  repay promptly receive an additional 3% incentive, effectively reducing their interest rate to just 4%.
- The  limit  for  collateral  free  short-term  agricultural  loans,  including  loans  for  allied activities, has been raised from Rs.1.60 lakh to Rs.2.00 lakh per borrower by RBI w.e.f 01 January 2025. This move enhances credit accessibility, particularly for small and marginal farmers  (over  86%  of  the  sector),  who  benefit  from  reduced  borrowing  costs  and  the removal of collateral requirements.
- In  order  to  bring  awareness  about  the  benefits  of  the  KCC  scheme  among  farmers, Union/State  Governments,  RBI,  NABARD  and  Banks  conduct  various  awareness programmes and IEC (Information, Education and Communication) campaigns.  Further, Government of India launched KCC Saturation Drive under Atma Nirbhar Bharat Abhiyan to provide KCC to all eligible farmers. Further, to expand the benefits of the Kisan Credit Card (KCC) to all eligible farmers engaged in Animal Husbandry, Dairy, and Fisheries (AHDF) nationwide district level weekly camps were also organized.
- Financial  Literacy  and  awareness  programmes  are  also  conducted  through  Centre  for Financial Literacy (CFL), Financial Literacy Camps (FLCs) which are set-up by RBI and banks respectively. Besides this, RBI also conducts Financial Literacy Week (FLW) every year to propagate the message of financial education on various themes among members of the public across the country.
- The Reserve Bank of India (RBI) allows banks to extend relief to distressed borrowers through various mechanisms such as loan restructuring, one-time settlement, compromise settlements etc. In addition, RBI has issued Master Directions on 17 October 2018 on relief measures by banks in areas affected by natural calamities, which, inter alia, provide for restructuring of loans by banks.

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Annexure referred to in part (a) to (c) of Lok Sabha Un-Starred Question no. 451 on 'Debt Burden on Farmers and Small Traders' answered on 02.02.2026

Details of Agriculture, MSME and Personal Loans Outstanding

(Amount in Rs. crore)

| As on year end date   | Haryana-State   | Haryana-State   | Haryana-State   | Jharkhand-Dumka District   | Jharkhand-Dumka District   | Jharkhand-Dumka District   |
|-----------------------|-----------------|-----------------|-----------------|----------------------------|----------------------------|----------------------------|
| As on year end date   | Agriculture     | MSME            | Personal Loans  | Agriculture                | MSME                       | Personal Loans             |
| 31 March 2019         | 65310           | 67518           | -               | 749.42                     | -                          | -                          |
| 31 March 2020         | 65983           | 68838           | -               | 795.94                     | 524.98                     | -                          |
| 31 March 2021         | 68205           | 70234           | -               | 369.04                     | 639.16                     | -                          |
| 31 March 2022         | 75559           | 95070           | -               | 443.33                     | 432.71                     | 285.52                     |
| 31 March 2023         | 83687           | 116994          | 18241           | 471.20                     | 465.05                     | 102.83                     |
| 31 March 2024         | 91464           | 147002          | 22552           | 570.09                     | 548.70                     | 133.10                     |
| 31 March 2025         | 97043           | 174027          | 27481           | 669.38                     | 659.33                     | 139.54                     |
| 30 September 2025     | 99471           | 194174          | 29255           | 718.52                     | 727.03                     | 144.94                     |

Source:

SLBC, Haryana and SLBC, Jharkhand