The State has recorded its worst performance in four years in disbursement of crop loans with only 41% of the target being achieved by January-end compared with the 72% at the same time last year.
The low credit offtake has been attributed to the farm loan waiver scheme. As per the State Economic Survey 2017-18, loans disbursed by licensed money lenders have increased by over 28.7%. Experts fear the amount of debt raised by farmers through such informal means would rise if private money lenders’ operations are taken into account.
The data is available with the State Level Banking Committee (SLBC), a consultative and co-ordination body of all financial institutions in the State.
Overall poor record
According to the agenda of the SLBC meeting on February 22, all financial institutions, ranging from public sector banks to district central cooperative banks, have registered their worst performance in recent years on crop loan disbursals.
On January 31, 2016, the crop loan disbursement was 75%, while on January 31, 2015, it was 72%. The agenda noted, “As of January 31, 2018, the overall achievement by banks is 41% of the target of ₹54,221 crore, showing negative growth. Achievement during the same period in the previous year was to the extent of 72%. Reasons for low credit offtake can be attributed to the announcement/implementation of the farm loan waiver scheme by the government.”
As per the minutes of the meeting, the low performance in the first three quarters will improve after the implementation of the farm loan waiver. Farmer leaders, however, think otherwise. “Both kharif and rabi seasons for the previous year are over. For kharif, loans were taken in June, while for rabi, in October. Who would take crop loans now?” asked Ajit Nawale, secretary, Maharashtra unit of the All India Kisan Sabha.
Mr. Nawale said the delay in announcing the loan waiver led to farmers delaying in repaying loans.
He said, “Since the previous loans were not paid, banks did not give new credit. And by the time the whole process was concluded, the farmers had no option but to rely on private money lenders. Due to strict conditions imposed by the government, many did not even benefit from the scheme.”
Published - March 21, 2018 12:16 am IST
