Crop loan waiver: Banks reject Punjab govt’s proposal to repay in instalments
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Crop loan waiver: Banks reject Punjab govt’s proposal to repay in instalments

“What the Punjab government owes us should be paid back in one go. Returning loan in instalments will lead to a new practice, which other states would follow” said a state-level bankers’ committee official.

punjab Updated: Jul 25, 2017 09:10 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times, Chandigarh
Crop loan,farm debt,debt waiver
Farmers busy in fields at Ramgarh village in Patiala. (HT File Photo)

The banks have rejected the state government’s proposal to pay back the farmers’ debt in instalments saying “it’s not possible”.

“What the Punjab government owes us, should be paid back in one go,” said a senior official of the state-level bankers committee (SLBC), a consortium of nationalised and private banks. Paying back the loan in instalments will lead to a new practice, which all the states would like to follow,” he said.

The state government plans to waive up to Rs 2 lakh crop loan of the small and marginal farmers — Rs 6,000 crore that they owe the nationalised and private banks and Rs 3,500 crore of the cooperative bank and its district-level subsidiaries.

“It can only be possible if the Reserve Bank of India (RBI) allows the government to do so,” said the official.

During the budget session, chief minister Captain Amarinder Singh announced that the state would own up Rs 9,500 crore loan of farmers and would pay back to banks in instalments. Last week, the CM met Union finance minister Arun Jaitley to work out an arrangement. However, there is no word on it from the Centre so far.

On Monday, the SLBC supplied the breakup of loan on farmers in different land holding categories. The figures say there are 5.71 lakh marginal farmers (with land holdings up to 2.5 acres) with a loan of up to Rs 2 lakh, making it to Rs 2,750 crore. Small farmers (upto 5 acres) owe a total of Rs 3,350 crore to the nationalised and private banks. The total debt comes out to be Rs 6,100 crore.

There are 1.46 lakh marginal farmers who have more than Rs 2 lakh of crop loan. Small farmers, who owe a crop loan of more than Rs 2 lakh would not get any waiver, said the SLBC official.


T Haque, chief of the panel set up by the Punjab government to assess the quantum of agriculture debt, told HT that before giving a final report, he would interact with the farmers on July 30 and 31 in Bathinda, Jalandhar and Amritsar. “It is mandatory to talk to the farmers before taking a final decision. I am a sure tangible solutions would come during the meeting,” he said.


A panel member studying farmers’ debt told HT that a majority of farmers have opened multiple accounts to take crop loan, but they will get waiver on one account only. “There must be 10 to 20% such cases, which might bring down government cost of waiver scheme by Rs 950 crore to Rs 1,800 crore.

First Published: Jul 25, 2017 09:10 IST