Question : DEBT RELIEF FOR FARMERS

MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND MINISTER OF STATE IN THE MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION(PROF. K.V. THOMAS)

(a) & (b): As per the National Sample Survey Organization (NSSO) Report No.498 on “Indebtedness of Farmer Households”, average outstanding loan per farmer household was highest in the state of Punjab, followed by Kerala, Haryana, Andhra Pradesh and Tamil Nadu. The averages for the following ten states exceeded the national average:

States	Average loan outstanding (Rs.)
Punjab	41,576
Kerala	33,907
Haryana	26,007
Andhra Pradesh	23,965
Tamilnadu	23,963
Rajasthan	18,372
Karnataka	18,135
Maharashtra	16,973
Gujarat	15,526
Madhya Pradesh	14,218
All India	12,585

Government has not received any report indicating manifold increase in debt burden on farmers due to drought.

(c): The Government has implemented Agricultural Debt Waiver and Debt Relief (ADWDR) Scheme 2008. As per provisional figures, a total of 3.01 crore ‘small and marginal farmers’ and 0.67 core ‘other farmers’ have been benefited from the ADWDR Scheme 2008 involving debt waiver and debt relief of Rs.65,318.33 crore. This has significantly reduced the institutional debt burden of farmers.

Reserve Bank of India has issued comprehensive guidelines to the banks for providing debt relief to farmers affected by natural calamities including floods, droughts etc. These relief measures include, inter alia, restructuring of loans by way of conversion/rescheduling of loans, provision of fresh crop loans for affected farmers, treatment of converted/rescheduled of loans as ‘current dues’ and not to charge penal interest in respect of current dues in default, relaxed security and margin norms etc.

Crop loans upto a principal amount of Rs.3 lakh are being made available to the farmers at a lower rate of interest of 7 per cent per annum. In order to incentivise the prompt repayers, Government of India is providing an additional one per cent interest subvention from the year 2009-10 to those farmers who repay their short term crop loans as per schedule. Government has proposed to raise this subvention for timely repayment of crop loans from one per cent to two per cent for the year 2010-11. Thus, the effective rate of interest for such farmers will be five per cent per annum from the year 2010-11.