Jharkhand farmers to now get loan against 1 % interest | ranchi | Hindustan Times
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Jharkhand farmers to now get loan against 1 % interest

Jharkhand government has decided to offer interest subvention for short term loans to farmers under Interest Subvention Scheme

ranchi Updated: Jun 13, 2017 09:29 IST
Sanjoy Dey
Farmers sowing paddy saplings at Nagri village in Ranchi
Farmers sowing paddy saplings at Nagri village in Ranchi(HT File Photo/ Diwakar Prasad)

Jharkhand farmers in need of loan may not get a loan waiver, but they will soon get loan against just 1% of interest, provided they return the loan within the stipulated period. Those failing to meet the deadline will be deprived off the benefit.

Considering the resurgence of the farm loan waiver policy that has got many economists and policy makers worried, besides creating a major law and order issue for BJP ruled states, the Jharkhand government has decided to offer interest subvention for short term loans to farmers under Interest Subvention Scheme (ISS).

Additional chief secretary (finance) Amit Khare on Monday told HT that the modalities of ISS were ready and it would be tabled in the next cabinet for government’s approval. Currently, the farmers in the country are charged 7% interest on loan. The Centre provides partial relief to the farmers, who procure loans by offering 3% interest subvention. This brings down the interest charged to them to 4%.

“Our government has decided to give additional 3% interest subvention on the total interest, bringing down the interest to just 1%,” Khare said, adding, this exercise would cast the state exchequer an additional burden of Rs 40 crore.

He said the offer would give relief to those farmers as well who had taken loan last year and were desirous of returning the loan within the fresh deadline.

There are around 39 lakh farmers in Jharkhand who procure farm loans under Kisan Credit Card. Of them, around 15 lakh farmers owe around Rs 5,700 crore dues to various banks in the form of principle amount as well as interest.

Plagued with extreme weather conditions where certain parts of the state reel under floods, while several other parts reel under extreme drought conditions—in the last 16 years, Jharkhand has suffered drought on at least eight years- the farmers have often ended up being in losses. Worse: on several years when there had been bumper crop production, the state failed to procure and sell their produce on time.

Often failing to meet the targets, the government has on more than one occasion did not repay the price of the paddy/ crop procured from farmers. Last year, the government had hired National Federation of Farmers’ Procurement, Processing and Retailing Cooperatives of India (NACOF) to procure paddy in certain pockets of Jharkhand. This cooperative still owes Rs 28 crore dues to the farmers against their crops.

State minister of food and public distribution, Saryu Rai on Sunday took serious umbrage to the delay in payment to the farmers and asked the department concerned to address the issue immediately. On Monday, the department announced that it had released the Rs28 crore due amount with immediate effect.

“Due to pertinent issues like migration and trafficking of farmers and farm labourers, the farmers’ demand in this state often gets lost. We are going to meet the CM in a couple of days and demand total waiver of farm loans. Forget 1% interest, several farmers in this tribal state cannot return the principle amount as they often end up in losses,” said state secretary of Bharatiya Kisan Sangha (BKS), Sanjay Misra.