Punjab may go for conditional debt relief by setting a limit similar as done by Uttar Pradesh
Chandigarh | 28 April 2017
After Uttar Pradesh has announced farm loan waiver for farmers, the new Punjab government is also under the pressure to fulfill its poll promise of waiving off farmers loans. It has not yet reached on conclusion whether it should opt for debt relief or a debt waiver. Though sources say Punjab can go for conditional debt relief by setting a limit similar as done by Uttar Pradesh CM Yogi Adityanath.
The three member committee headed by Dr T Haque is meeting state government and the State-Level Bankers’ Committee today to understand the extent of farm loan and the possible ideas for farm loan waiver.
The state farmers are reeling under debt burden and at least a case of farmers’ suicide is in news every week. Situation is so bad that farmers had stopped depositing the installments after Captain Amrinder Singh was voted to power.
Bank officials say that the terms and conditions of loans of many farmers is such that from May month they would have to pay the interest at the rate of 12 percent instead of 4 percent. Bankers have also indicated if state government wants to waive off the farm loans, it should take over the entire debt and clear dues of the banks. But the Punjab’s economy is in bad shape to take huge debt burden. The state’s outstanding public debt currently is more than Rs 1.78 lakh crore.
The agricultural debt in Punjab has reached almost Rs 80000 crore from Rs 35000 crore in last three years out of which nearly Rs 15000 crore is the term loan. Out of this debt, the working capital loan (taken from the public sector and private, regional rural and cooperative banks) is around Rs 63000 crore, availed by 30.23 lakh farmers. The loan extended through Kisan Credit Cards is Rs 54,521 crore. The amount of loan availed from arhtiyas is still unknown. The RBI has started a debt swap scheme, wherein farmers can swap up to Rs 1 lakh of debt raised from an arhtiyas by availing a loan from a bank. Every year, 3 per cent of the agricultural credit is to be earmarked for the scheme.
The largest loan amount of Rs 48000 crore is from 23 public sector banks. Private Banks amount is Rs 17000 crore and around Rs 13500 crore is of five cooperative and rural banks.