Farmer suicides: New law to curb illegal lending | india | Hindustan Times
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Farmer suicides: New law to curb illegal lending

With most measures taken to stem farmer suicides in Vidarbha not working, the state has now decided to bring in a new law to prevent illegal private lending, reports Yogesh Joshi.

india Updated: Jan 02, 2009 21:07 IST
Yogesh Joshi

With most measures taken to stem farmer suicides in Vidarbha not working, the state has now decided to bring in a new law to prevent illegal private lending.

The new law, which will prevail over the old Bombay Moneylenders Act, 1946, will have more teeth to stop moneylenders from exploiting the state’s farmers, said state minister for cooperatives Harshavardhan Patil.

“The draft of the new law, Maharashtra Prevention of Moneylenders Act, 2008, is ready and has been sent to the Centre,” Patil said in Pune on Friday after inaugurating a workshop for officials of the cooperatives department. “Once we get the Centre’s assent, an ordinance will be in place, which will be turned into law in the coming budget session of Maharashtra assembly.”

With the new law looking imminent, the state can expect some check on illegally operating moneylenders, especially in rural parts of Vidarbha and Marathwada.

Farmers in Vidarbha often approach private moneylenders after banks refuse them loans. They frequently lend farmers money at exorbitant rates.

A report submitted by economist Narendra Jadhav on farmer suicides says, “Constant pressure from banks and more so from unauthorised moneylenders led to severe mental distress, compromising their (the farmers’) dignity and resultant frustration drove the self-respecting farmers to commit suicide.”

Many of the moneylenders operating illegally in parts of Vidarbha are believed to be from Andhra Pradesh. After the neighboring state clamped down against these lenders, some of them intruded in to Vidarbha through border areas to continue their business.

The new law is expected to plug loopholes in the old law and have additional checks. “There are certain loopholes in Section 13 (b) of old moneylenders act, through which the unauthorised moneylenders exploit farmers,” said Patil. “In the new law concerns have been addressed while removing these loopholes.”

There had been 5,400 complaints against unauthorised moneylenders out of which 1,600 cases were disposed off, the minister said.

It, however, remains to be seen how effectively the new law, once it takes effect, would be implemented.

“The state has not done much to effectively implement the existing moneylenders act,” said Kishore Tiwari of the Vidarbha Jan Andolan Samiti, who has been tracking farmer suicides in the region. “Despite the then home minister R.R. Patil’s stern warning to moneylenders, very few cases were registered against them while exploitation of farmers blatantly went on.”