PM’s package for farmers provides relief to co-operative banks instead

MUMBAI: PM Manmohan Singh announced a Rs 3,750-crore special package for Vidarbha farmers on July 1. Yet 310 farmers have committed suicide since then. That’s not all, the total number of suicides in Vidarbha this year alone is 970.

Sources from the banking industry indicate that the goodies doled out by Mr Singh have actually helped politically controlled co-operative banks and not the farmers in distress.

The package had included Rs 50 lakh each, to be made available to six district collectors, a Rs 712 crore interest waiver and Rs 1,300 crore for loan restructuring. The balance amount of the package was for long-term measures such as irrigation and seed replacement.

Much to the dismay of the farmers, a major portion of the amount has gone to six district co-operative banks controlled by NCP leaders and has been used to clean up their books. It is no surprise that NCP chief Sharad Pawar is the agriculture minister in Mr Singh’s Cabinet.

“The Rs 712 crore sanctioned for writing off interests and Rs 1,300 crore for loan restructuring has been more beneficial to banks than the farmers,” a top official from the banking industry told ET. In Maharashtra farm lending is done through district co-operative banks (DCBs) which are funded by the apex co-operative bank Maharashtra State Co-operative Bank (MSCB) that draws funds from Nabard. In this case, the money promised by the PM has gone six DCBs, all led by NCP men.

The six beneficiary district co-operative banks are Buldhana DCB led by Rajendra Shingane, a minister of state in Vilasrao Deshmukh’s Cabinet, Yawatmal DCB led by state minister Manohar Naik, Akola DCB chaired by Subhash Korape, Vardha DCB chaired by former minister Suresh Deshmukh, Amravati DCB led by former minister Harshavardhan Deshmukh and Vashim DCB led by former minister Subhash Thakare.

“Any way the farmers were not in a position to pay their dues. Their non-payment was widening these banks’ NPAs. The PM’s package has cleaned up these banks’ books,” a official explained.

This, in effect, means that the farmers in six districts had only about Rs 3 crore available to relieve their agony. “This is the only amount, Rs 50 lakh each for six district collectors, that was left for farmers. This hardly is a relief,” a government official said.

“The PM’s much publicised package is nothing but a jugglery of numbers,” criticised Nitin Gadkari, the state BJP president who hails from Vidarbha. According to him, the NCP and agriculture minister Sharad Pawar has betrayed Mr Singh by letting this happen.

A Congress leader from Nagpur admitted that the PM’s package neither has helped farmers nor the party. “The NCP is the real beneficiary,” he said.