Mumbai, February 27: With Maharashtra Chief Minister Devendra Fadnavis waived Rs 34,000-crore farm loan two years ago, the most benefited banks with this move are the District Central Cooperative Banks (DCCBs). As per the reports, the DCCBs have reported lower outstanding farm credit in comparison to nationalised banks which have shown an increase in the amount.

Earlier the BJP-led state government in Maharashtra had announced Rs 34,000-crore farm loan waiver – under the Chhatrapati Shivaji Maharaj Shetkari Sanman Yojna – in June 2017. The government had then stated that pending crop loans up to Rs 1.50 lakh were to be waived for individual farmers, while an incentive of Rs 25,000 was announced for those who repay their loans regularly. Farm Loan Waivers Do Not Benefit Majority of Farmers, Says Narendra Modi. 

Almost two years after Chief Minister Devendra Fadnavis announced Rs 34,000-crore farm loan waiver, District Central Cooperative Banks (DCCBs) seem to have benefited more than the nationalised banks under the scheme.

The DCCBs have reported lower outstanding farm credit, even as nationalised banks have shown an increase in the amount. As per to the reports, the government had initially planned to implement the pending loans from 2009 onwards, but later extended the time period to include credits pending since 2001.

According to the scheme, farmers can avail 11-month crop loan from finance institutions at six per cent interest. The scheme also gives the provision to a farmer for three per cent interest subvention from the Centre and a similar two per cent subvention from the state if they pat the loans timely. With this, the loan interest rate becomes just one per cent, and the farmers can use the capital for investment in seed and other agricultural inputs. NITI Aayog's Vice Chairman Takes Swipe at Rahul Gandhi for Criticising Narendra Modi Over Farm Loan Waiver Issue. 

However, if failed to pay the loan, the banks can force farmers to turn to private money lenders, who charge around 10-15 per cent interest. This further pushes a farmer into a debt, which experts singled out as a primary cause of farmer suicide.

The report states that till date a pending farm credit stands at Rs 18,062.07 crore, out of the total Rs 43,074.01 crore, have been waived in Maharashtra. Inputs from the data provided by State Level Bankers’ Committee (SLBC) – a state-level panel of institutional lenders and government offices which monitors the flow of credit to priority sector — the 31 DCCBs fared better in terms of implementation of the scheme.

The report published in The Indian Express reports that the outstanding farm credit for DCCBs stood at Rs 25,182.62 crore till December 31, 2019. The amount stood at Rs 30,692.49 crore during the same period in the previous fiscal. Also, Scheduled Commercial Banks (SCB) reported Rs 88,506.84 crore outstanding crop loan on December 31, 2018 – out of which Rs 85,372.03 crore stands at the end of the third quarter of the 2017-18 fiscal. This shows a relatively better performance of cooperative banks than nationalised banks, even when SCBs had received more funds in terms of the waiver. Kisan Long March Again: Farmers Embark on 180 km Foot-Journey From Nashik to Mumbai, Demand MSP Hike, Loan Waiver. 

The report further states that according to the Government of Maharashtra’s Department of Cooperation a total of Rs 9,843 crore pending loan was waived for SCBs, while the figure for the cooperative banks stood at Rs 8,219 crore till February 22. Confirming the report, managing director of Osmanabad District Cooperative Bank – Vijay Ghonse Patil – said the bank has received a total waiver worth Rs 89.41 crore. Patil opines that the effect of this scheme in the long run.

(The above story first appeared on LatestLY on Feb 27, 2019 04:44 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).