Farmers' fillip
There appears to be some hope in the tragic story of farmers’ suicide that is unfolding in Maharashtra for the past two years. The special relief packages announced by the centre and the government of Maharashtra have facilitated a remarkable grow...
By Abhiram Ghadyalpatil, TNN |
MUMBAI: There appears to be some hope in the tragic story of farmers’ suicide that is unfolding in Maharashtra for the past two years. The special relief packages announced by the centre and the government of Maharashtra have facilitated a remarkable growth in agriculture credit.
Around 13 lakh farmers — up eight lakhs compared to last year — have borrowed fresh crop loans in the current farm season, Mantralaya officials monitoring the relief measures told ET.
The number of borrowers includes close to 4 lakh farmers who are expected to take crop credit for the first time, a senior bureaucrat closely associated with the state package said.
“Compared to the last kharif season, this is a remarkable growth in rural credit in the backdrop of suicides. Last season, all lending institutions had covered only 4.5 lakh farmers. This year, agriculture credit through formal channels will cover almost 75% of the total eligible farmers,” said principal secretary Umesh Sarangi who is involved in the implementation of the relief measures.
In the last kharif season, around 4.5 lakh farmers had borrowed loans around Rs 747 crore. In the current season, the total debt drawn by around 6.3 lakh farmers has already touched Rs 1,094 crore. “Rescheduling of existing debt, fresh credit inflow, and intervention by the centre as well as the state in rationalising the rate of interest would result in a record 13 lakh farmers borrowing Rs 2,082 crore this kharif season,” Mr Sarangi told ET.
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The government is confident it would meet the target, provided the nationalised banks step up lending. “The chief minister expressed his displeasure over the banks’ indifference towards lending despite intervention by the prime minister and the union finance minister. Mr Deshmukh told the bank representatives that he would formally convey his displeasure to their boards and also the centre if they did not co-operate in implementing the relief measures,” a senior bureaucrat told ET.The number of borrowers has gone up mainly because of the rescheduling of existing loans and debt interest waiver granted by the centre as well the state government. Under both the relief packages, agriculture debt worth Rs 1,011 crore drawn by 6.57 lakh farmers has been rescheduled.
This is almost 85% of the target of rescheduling debt worth Rs 1,296 crore. The state has deposited 236.86 crore in the accounts of 4.2 lakh farmers on account of interest waiver. The interest waiver announced by the state in December ‘05 on individual debt up to Rs 25,000 made around 4.2 lakh farmers eligible to seek fresh loans.
In July, Prime Minister Manmohan Singh followed this up declaring another interest waiver that made another 3.3 lakh farmers eligible for taking fresh credit. The centre and the state have to share the cost of this interest waiver worth Rs 712 crore.
A simultaneous implementation of both the packages has led to a hike in the total outlay of the state’s package. Originally pegged at Rs 1,075 crore in December ‘05, state’s farmers’ relief bill has shot up to Rs 1,489 crore now.
Earlier, the package provided for Rs 61 crore on account of the interest waiver announced by the state, “The earlier allocation was for individual debt up to Rs 25,000. Later, we waived interest on debt more than Rs 25,000 but maintained the ceiling of Rs 25,000. This measure increased the burden from Rs 61 crore to Rs 240 crore. As state’s share in the centre’s interest waiver, we have provided Rs 116 crore more and set aside another Rs 48 crore as fresh credit flow for those farmers who could not be eligible for fresh loans even after rescheduling of outstanding debt and interest waiver,” Mr Sarangi said.
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