Banks in Maharashtra have issued only 22% of the kharif season lending target of Rs43,342 crore till 27 June, said an official at the state department of cooperation
Mumbai: Farm discontent is raising its head in Maharashtra yet again as banks remain tight-fisted on crop loans at the beginning of the sowing season, cancelling out the benefits of last year’s mega loan waiver.
Banks in Maharashtra have issued only 22% of the kharif season lending target of Rs43,342 crore till 27 June, said an official at the state department of cooperation. June, incidentally, is the most critical month in the farm cycle when the farmers need money to procure seeds and begin sowing.
Last year’s Rs34,022 crore loan waiver was designed to clear the dues in defaulted farm loans and make farmers eligible for loans again. That process seems to have been delayed.
The kharif season crop credit disbursement this year was 5% below the corresponding period in 2017, said the official quoted above.
“By 30 June 2017, banks had achieved 27% of the kharif target. This was before the farm loan waiver kicked in. It was announced on 24 June last year but since the implementation took a long time, it did not immediately make the indebted farmers eligible for fresh credit. But we were expecting a higher credit disbursement this kharif since the loan waiver should have ideally made several farmers eligible for fresh credit,” the official said requesting anonymity.
Last year’s loan waiver, which had a cap of Rs1.5 lakh came after strong protests, and a similar waiver by the new Bharatiya Janata Party (BJP) government in Uttar Pradesh. Through an online system based on biometric identification, the state government identified nearly 5.6 million farmers as eligible beneficiaries.
The official cited above said that by 31 May this year, the government deposited around Rs24,500 crore in nearly 4.8 million farmers’ bank accounts.
“The government has so far transferred money into the accounts of nearly 4 million farmers and banks need to clear these accounts now. We expected that the accounts that have been cleared for loan waiver benefits would become eligible for fresh credit. That does not seem to have happened,” the official said.
The dismal credit coverage has already caused some consternation for the Devendra Fadnavis-led BJP government. Last week, Fadnavis wrote to Union finance minister Piyush Goyal, requesting him to direct banks to increase crop loans in Maharashtra.
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