Waiving off loans in phases not helping as banks refuse fresh loans: farmers
As the kharif season sets in, farmers in Telangana have asked the State government to take over all the pending farm loans, which are supposed to be waived off, so that they can seek fresh loans from banks.
Farmers said waiving loans in four-five phases is not helping them as banks are shying away from giving fresh loans, while existing loans are not cleared.
The farm loan waiver burden on the Telangana State chequer is pegged at ₹24,000 crore, which is almost ₹8,000 crore more than what the State paid to the banks during 2014-18 to waive loans during that period.
The ruling Telangana Rashtra Samithi (TRS) government, which went for early polls in December 2018, promised to waive all the outstanding farm loans under ₹1 lakh as on December 11, 2018.
Unconfirmed reports suggest that the burden could be much more. The amount, according to those reports, is pegged at ₹31,000 crore.
About 50 lakh farmers will be eligible for the loan waiver programme this time.
Though the Congress party promised to waive off loans up to ₹2 lakh in the Assembly elections, the TRS decided to keep the limit at ₹1 lakh. Last time, the government paid the banks about ₹16,000 crore in four phases.
“But this is not helping the farmers much. The government should take over all the loans into its account and pay to the banks according to its convenience,” S Malla Reddy of Telangana Rythu Sangham told BusinessLine.
Waiver programme soon
The Government is likely to prepare modalities for the waiver programme soon. With weathermen expecting a normal monsoon this time, farmers are getting ready for the kharif, which would involve purchase of inputs.
Though the government released ₹2,220 crore for the Rythu Bandhu, through which each land owning farmer would get ₹5,000 an acre for kharif investments, the farmers would require more funds.
The government released ₹2,200 crore out of the ₹6,900 crore sanctioned for the Rythu Bandhu disbursals ahead of the kharif. The disbursals would be remitted directly into the accounts of farmers through E-Kuber application of RBI.
The TRS government has increased the Rythu Bandhu assistance to ₹5,000 from ₹4,000 that it gave last year. The farmers will get a similar amount in the rabi season too.
Rythu Bandhu not enough
Malla Reddy argued that giving Rythu Bandhu to farmers and waiving off loans are not going to solve their problems. “What they really want is minimum support price for their produce. If you ensure that, it will solve their liquidity problem. Or, they will be saddled with loan burden every year,” he felt.