Waive of freedom
As many 4.29 crore farmers across the country heaved a sigh of relief as they shed their debt burdens after the Rs 71,000 crore government-sponsored largesse announced recently comes into full effect from Monday, report Gaurav Choudhury & Arun Kumar.Updated: Jul 01, 2008 02:36 IST
As many 4.29 crore farmers across the country heaved a sigh of relief as they shed their debt burdens after the Rs 71,000 crore government-sponsored largesse announced recently came into full effect from Monday.
Under the scheme first announced in this year’s Budget, 3.69 crore small and marginal farmers with a land holding of less than two hectares now have their entire loan overdue on December 2007 waived off.
Another 60 lakh farmers with a land holding of over two hectares have availed of a one time settlement (OTS) rebate of 25 per cent of their outstanding loans subject to the condition that the balance 75 per cent is paid in three instalments by June 30, 2009.
“Such a scheme is unprecedented in India,” said OP Bhatt chairman and managing director of the country’s largest bank, State Bank of India.
SBI has written off loans worth Rs 6,000 crore of 19 lakh small and marginal farmers while another
6 lakh farmers have been granted relief worth Rs 1,500 crore.
Farmer Hukum Singh of Matiala village in western Uttar Pradesh could not hide his glee as he collected his debt-free certificate from an SBI branch in Dasna near Hapur.
“A relief of Rs 1.50 lakh for a farmer like me who struggles to make his ends meet is like a fresh lease of life,” Singh said.
Jai Raj, Singh’s neighbour, who is also debt-free said: “I am relieved, but would avoid taking loans as such schemes are rare.”
Not every borrower, however, was as upbeat.
Samsuddin, a farmer from Dasna village, has threatened to move court. “I had borrowed Rs 70,000 and repaid every rupee but my name is still on the list of defaulters. The bank should strike my name off or refund me,” he said.
An estimated 55 per cent of the package has been disbursed to borrowers from cooperative institutions; 35 per cent to borrowers from commercial banks; and 10 per cent to borrowers from regional rural banks (RRBs).
Although the final figures are yet to come, bankers feel that around Rs 46,000 crore of waiver or relief would be routed through cooperative banks and RRBs.
“These farmers would be entitled to fresh loans, which they can seek simultaneously,” said Alok Misra, CMD of Oriental Bank of Commerce.
Punjab National Bank, the second largest bank in the country, has given relief to 4.3 lakh farmers including 3.37 lakh small and marginal farmers and nearly 1 lakh farmers other categories.
“The bank has given a complete waiver of Rs 1,157 crore to small and marginal farmers and a relief to other farmers, which is 25 per cent of the total outstanding loan,” KC Chakrabarty CMD of PNB, told Hindustan Times.
“Besides helping the farmers and making them eligible for fresh loan, the schemes would also help the bank in term of cleaning the balance sheet and getting clean borrowers,” said MBN Rao, chairman and managing director of Canara Bank.
Canara Bank has waived Rs 1,200 crore to 4.7 lakh small and marginal farmers, said Rao. In addition, it has given relief of 25 per cent to over one lakh farmers.
Union Bank of India has waived Rs 713 crore of debt to 2.68 lakh small and marginal farmers and given a relief of Rs 248 crore to 84,000 other farmers with land holdings of less than five hectares.
“We completed the entire exercise last week,” said MV Nair, chairman and managing director of Union Bank.
Oriental Bank of Commerce has extended the benefit to 1.21 farmers involving loans worth Rs 496.37 crore.