(a) whether the Government proposes to provide soft loans to farmers;
(b) if so, the details thereof :
(c) whether the private banks have also been directed to provide such loans to
the farmers; and
(d) if so, the reaction of the private banks thereto?
FINANCE MINISTER (SHRI P.CHIDAMBARAM)
(a) to (d) : A Statement is laid on the Table of the House.
Statement referred, to Parts (a) to (d) of LOk Sabha Starred Question No. 426 to be
answered on 4th May 2007, regarding; Soft Loans to farmers, tabled by Shri Jivabhai
Ambalal Patel and Shri Harisinh Chavda.
(a)&(b) : To reduce the burden of interest on Crop Loans availed by farmers for Kliarif
and Rabi 2005-06, an amount equal to two percentage points of the borrower`s liability
on the principal amount upto Rs. 1,00,000/- each was credited to their account. Thereafter,
from Kharif 2006, to ensure that the farmer receives Short-Term Production Credit at 7% with
an upper limit of Rs.3 lacs on the principal amount, the Government is providing interest
subvention of 2% per annum to Public Sector Banks, Regional Rural Banks(RRBs) and Cooperative
Banks on their lending from their own resources and refinance at concessional rates to
cooperative banks and RRBs on their borrowings from NABARD.
(c)&(d) : No directions have been issued to Private Sector Banks to provide soft loan to
farmers. The outstanding advances to agriculture by Private Sector Banks in the last 3 years
has shown an increase as indicated below :
March, 2004 - Rs. 17,649 crore
March, 2005 - Rs. 21,473 crore March, 2006 - Rs. 36,185 crore
September 2006 - Rs. 32,178 crore