Lok Sabha Question No. 516 (UNSTARRED), answered on 2016-02-26
Subject: Debt Burdened Farmers
Ministry: FINANCE
Asked by: SADASHIV KISAN LOKHANDE

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

## LOK  SABHA

Unstarred Question No. †516

To be answered on February 26, 2016/ 7 Phalguna, 1937 (Saka)

## Debt Burdened Farmers

†516. SHRI SADASHIV LOKHANDE:

Will the Minister of FINANCE be pleased to state:

(a) the per capita loan burden in the country as on date;

- (b) the amount spent on the interest of loan so far during the last three years and the current financial year; and
- (c) the measures taken by the Government to reduce this burden?

## Answer

The Minister of State in the Ministry of Finance (Shri Jayant Sinha)

- (a):  National  Sample  Survey  Organisation  (NSSO)  conducted  Situation  Assessment  Survey (SAS) of Agricultural Households during NSS 70 th  round (January, 2013- December 2013) in the rural areas of the country for the reference period of the agricultural year July 2012- June 2013. Based  on  the  results  of  the  survey,  estimated  average  amount  of  outstanding  loan  per agricultural household as on the date of the survey was Rs.47,000/-.
- (b)&(c):  Data  relating  to  amount  spent  on  the  interest  on  loans  taken  by  farmers  is  not maintained. In order to ameliorate the ill-effects of non-institutional indebtedness of farmers and increase the availability of hassle-free institutional credit to them, the Governmenthas, inter alia, taken the following major steps :-
-  As  per  Reserve  Bank  of  India  (RBI)'s  extant  guidelines  on  Priority  Sector  Lending (PSL),  all  Domestic  Scheduled  Commercial  Banks  have  been  mandated  to  earmark 18%  of  their  Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  amount  of  OffBalance Sheet Exposure (OBE), whichever is higher, as on the corresponding date of the previous year, for lending to Agriculture. Foreign banks with 20 branches and above have to achieve the Agriculture Target within a maximum period of five years starting from April 1, 2013 and ending on March 31, 2018.
-  The Government has also been setting an annual target for the flow of credit to the agriculture sector, which is being consistently surpassed by banks.
-  The  Government  provides  interest  subvention  to  make  available  the  short-term  crop loans  upto  Rs.3  lakh  at  the  interest  rate  of  7%  per  annum  and  in  case  of  prompt repayment, the same gets reduced to 4%.
-  In  order  to  ensure  that  all  eligible  farmers  are  provided  with  hassle-free  and  timely credit for their agricultural operations, the Government has introduced the Kisan Credit Card  (KCC)  Scheme,  which  enables  them  to  purchase  agricultural  inputs  such  as seeds, fertilisers, pesticides, etc. and draw cash to satisfy their consumption needs.
-  The KCC Scheme has since been simplified which has the provision of ATM-enabled 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.
-  To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
-  Banks  have  been  advised  by  Reserve  Bank  of  India  (RBI)  to  waive  margin/security requirements of agricultural loans upto Rs.1,00,000/-. Banks have also been advised by RBI  to  dispense  with  obtaining  'No  Due  Certificate'  from  the  individual  borrowers (including SHGs & JLGs) in rural and semi-urban areas for all types of loans including loans  under  Government  Sponsored  Schemes,  irrespective  of  the  amount  involved unless the Government Sponsored Scheme itself provides for obtention of 'No Dues Certificate'.
-  RBI has issued Standing Guidelines for Relief Measures to be provided by respective lending  institutions  in  areas  affected  by  natural  calamities  which,  inter  alia,  include identification of beneficiaries, extending fresh loans and restructuring of existing loans, relaxed security and margin norms, moratorium, etc. The moment calamity is declared by the concerned District Authorities, these Guidelines have been so designed that they are automatically set in motion without any intervention and this saves precious time.