Parliamentary panel wants RBI norms on farm credit followed effectively

NEW DELHI: A Parliamentary committee has directed the government agencies to ensure that RBI guidelines related to institutional credit for farmers during natural calamities are followed in letter and spirit.

The Committee on Agriculture, headed by Basudeb Acharia, which presented its report in Parliament today called for more effective steps by the government to mitigate the impact on deficient monsoon on the farm sector.

The panel expressed satisfaction over the RBI's scheme to provide relief to farmers in the event of occurrence of natural calamities, but it felt that the government needs to work more seriously on implementing the scheme.

"What perturbs the committee is that in spite of these RBI guidelines, their proper implementation leaves much to be desired. This is because farmers have to go through a myriad of processes and cumbersome procedures before they finally receive some financial support to help them tide over the crisis brought by natural calamities," it pointed out.

The committee is of the view that faulty implementation forces farmers to approach private moneylenders for debt.

"It is precisely these bottlenecks, which force farmers to knock at the doors of private moneylenders who by virtue of their informal and speedy disbursal of credit, force farmers into the vicious and never ending debt cycle from which they get no respite," it observed.

In view of the difficult situations faced by the farmers in the event of a natural calamity, the committee has urged the concerned government agencies to follow the RBI guidelines "in letter and spirit".