MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE
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(a): The Government since 2006-07 has been implementing the Interest Subvention Scheme (ISS) under which Short Term Crop Loans upto Rs.3.00 lakh are provided to the farmers at subvented interest rate of 7 percent per annum. Further, in case of timely repayment of loans, an additional interest subvention of 3 percent as prompt repayment incentive is also provided to the farmers. Thus, in case of prompt payee farmers, the Short Term Crop Loan is effectively made available at 4 percent per annum. The Scheme is continued in 2017-18. The quantum of interest subsidy towards payment of both pending claims on account of 2% interest subvention to banks and 3% prompt repayment incentives to farmers released to National Bank of Agriculture and Rural Development (NABARD) and Reserve Bank of India (RBI) by the Government during the last three years is as under:
(Rs. crore)
Year 2014-15 2015-16 2016-17
Amount Released 6,000 13,000 13,397.13
The data on State/District-wise release of interest subsidy under ISS is not available.
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(b): No, Madam.
(c): The National Sample Survey Office (NSSO) conducted a Situation Assessment Survey (SAS) of Agricultural Households during its 70thround (January-December, 2013) in the rural areas of the country with reference to the agricultural year (July, 2012-June, 2013). Among various indicators related to the agricultural households, the survey also collected information about the amount of outstanding loans of the agricultural households at the time of the survey and the sources from which they were taken. These loans included all kind of loans taken by the agricultural households irrespective of the purpose for which such loans were taken. As per the results obtained from the survey, the average amount of outstanding loans per agricultural household was approximately Rs.47000/-. The State-wise figures of average amount of outstanding loans per agricultural household, percentage of outstanding loan amount taken from agricultural/ professional money lender, number and percentage of agricultural households having outstanding loans from agricultural/ professional money lenders as obtained from SAS 2013 is at Annexure-I.
(d): The Government is not in favour of loan waiver, as it negatively impacts credit and recovery climate and has severe systemic consequences. However towards reducing the debt burden of farmers and increasing availability of institutional credit to farmers, following major initiatives have been taken:
i. With a view to ensuring availability of agriculture credit at a reduced interest rate to farmers, the Government is implementing the Interest Subvention Scheme (ISS) since 2006-07. In 2017-18, the Short Term Crop Loans up to Rs.3.00 lakh have been made available to farmers at a subvented interest rate of 7 percent per annum. Further, additional subvention of 3 percent has been provided on prompt repayment, thereby reducing the effective rate of interest to 4 percent per annum for such farmers. Some State Governments in fact also provide additional interest subvention, reducing the effective interest burden on short term crop loans to zero.
ii. Government sets annual target for the flow of credit to the agriculture sector. Banks have been consistently surpassing the annual target.
iii. Reserve Bank of India (RBI) has issued Priority Sector Lending Guidelines (PSL), which 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.
iv. As per PSL guidelines loans to distressed farmers to repay non-institutional lenders are eligible under priority sector. Besides loans to stressed persons (other than farmers) not exceeding Rs. 1,00,000/- per borrower to repay their debt to non-institutional lender are also eligible for the purpose of priority sector lending by banks.
v. 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.
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vi. To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks. The Government also promotes formation of Farmer Producer Organisations (FPOs) in a big way to enable farmers to leverage economies of scale, not only for agricultural inputs but also for enhanced marketing opportunities.
vii. Banks have been advised by RBI to waive margin/security requirements of agricultural loans upto Rs.1,00,000/-, vide RBI’s circular dated 18th June, 2010.
RBI has issued directions for Relief Measures to be provided by respective lending institutions in areas affected by natural calamities which, inter alia, include, restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These directions 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.
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