Lok Sabha Question No. 2337 (UNSTARRED), answered on 2016-03-11
Subject: Agricultural Loan Waiver Scheme
Ministry: FINANCE
Asked by: LAKHAN LAL SAHU

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

## LOK  SABHA Unstarred Question No. † 2337

## To be answered onMarch 11, 2016/Phalguna21, 1937 (Saka) Agricultural Loan Waiver Scheme

† 2337. SHRI LAKHA LAL SAHU:

Will the Minister of FINANCE be pleased to state:

- (a) the details of various debt-waiver schemes  for farmers  announced  by  the Government during the last three years;
- (b) the number of farmers benefited by the schemes in each State/UT;
- (c) the expenditure incurred by Government on the such schemes; and
- (d) the corrective measures taken/being taken by the Government in this regard?

## Answer

## The Minister of State in the Ministry of Finance

(Shri Jayant Sinha)

(a)  to  (d):  No  debt  waiver  scheme  for  farmers  was  announced  by  the  Central Government during the last three years.Towards reducing the debt burden of farmers and increase availability of institutional credit to farmers, following major initiatives have been taken:

-  The Agricultural Debt Waiver and Debt Relief Scheme, 2008 (ADWDRS, 2008) was  announced  in  the  Union  Budget  2008-09  and  detailed  guidelines  were issued on 28.5.2008. The debt waiver portion of the ADWDRS, 2008 was closed by its  due  date  i.e.  30.6.2008,  while  the  debt  relief  portion  of  the  Scheme  was extended  upto  30.6.2010.   The  Scheme  benefitted  3.73  crore  farmers  to  the extent of Rs. 52,259.86 crore.
-  The guidelines on Priority Sector Lending (PSL) of Reserve Bank of India (RBI) mandate  all  Domestic  Scheduled  Commercial  Banks  to  earmark  18%  of  their Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  amount  of  Off-Balance 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.
-  Government  sets  annual  target  for  the  flow  of  credit  to  the  agriculture  sector. Banks have been consistently surpassing the annual target.
-  With a view to ensuring availability of agriculture credit at a reduced interest rate of 7%  p.a. to farmers, the Government  of  India  implements  an  interest subvention scheme for short term crop loans up to Rs. 3.00 lakh. Under the said scheme, additional subvention of 3% is given to those farmers who repay their short term crop loan in time, thereby reducing the effective rate of interest to 4% p.a. for such farmers.
-  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 draw cash to purchase agricultural  inputs  such  as  seeds,  fertilisers,  pesticides  as  well  as  meet  other agricultural and consumption needs.
-  The KCC Scheme has since been simplified by providing the farmers with ATM enabled debit card based on one-time documentation and built-in cost escalation in 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  RBI  to  waive  margin/security  requirements  of agricultural loans upto Rs.1,00,000/-, vide RBI's circular dated 18 th  June, 2010.
-  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, restructuring of existing loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. The Guidelines have been so designed that the moment calamity is declared by the concerned  District  Authorities  they  are  automatically  set  in  motion  without  any intervention,  thus  saving  precious  time.  The  benchmark  for  initiating  relief measures  by  banks  has  also  been  reduced  to  33%  crop  loss  in  line  with  the National Disaster Management Framework.