Capt’s loan waiver not enough: Crop loans of marginal farmers higher than Rs 9,500
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Capt’s loan waiver not enough: Crop loans of marginal farmers higher than Rs 9,500

Total outstanding crop loans of 5.7 lakh marginal farmers with less than 2.5 acres of land stands at Rs 9,845 crore; that of 8.1 lakh small farmers with 2.5 to 5 acres of land at Rs 18,714 crore

punjab Updated: Jul 16, 2017 10:20 IST
Sukhdeep Kaur
Sukhdeep Kaur
Hindustan Times, Chandigarh
chief minister Captain Amarinder Singh,Punjab,farm loans
A distraught farmer in a starved paddy field at Mandi village, Patiala, on Sunday.(Bharat Bhushan/HT Photo)

Promise of a complete debt waiver for farmers turned out to be a vote-catcher for the Congress in Punjab.

On the day chief minister Captain Amarinder Singh gave out details of the debt waiver in the budget session last month, his government also laid on table a white paper on the state of finances in Punjab to highlight the “legacy of debt” left by the previous SAD-BJP government.

With no money to spare for the party’s lofty poll promises, finance minister Manpreet Badal earmarked Rs 1,500 crore for farm debt in the budget presented the next day. The Opposition outrage forced the CM to reveal that his government intends to write off a total of Rs 9,500 crore in the coming years.

The interim report of the expert group headed by Dr T Haque has zeroed in on the beneficiaries — Rs 2 lakh relief for all 5.7 lakh marginal farmers who own up to 2.5- acre land irrespective of their outstanding crop loan amount and for 4.5 lakh small farmers (who own between 2.5 acres to 5 acres) who have outstanding crop loan of up to Rs 2 lakh. Together, 10.25 lakh farmers of the state would get Rs 2 lakh relief each.

But the figures of outstanding debt of farmers on which the Haque panel is basing its calculations reveal the Rs 9,500-crore waiver will not provide any major relief even to the marginal farmers.

The total outstanding crop loans of 5.7 lakh marginal farmers alone stands at Rs 9,845 crore.

Only 4.2 lakh marginal farmers have outstanding crop loan of up to Rs 2 lakh.

There are 1.1 lakh loan accounts of farmers who have outstanding crop loan between Rs 2 lakh and Rs 5 lakh, amounting to Rs 3,189 crore.

Another 35,877 farmers owe more than Rs 5 lakh each of crop loans, worth Rs 3,908 crore. The total outstanding crop loan of 8.1 lakh small farmers stands at a staggering Rs 18,714 crore.


The crop loans of all farmers, including those with more than five acres of land, stands close to a staggering Rs 60,000 crore!

And this is just half the story. The marginal farmers have also taken term loans for buying tractors, implements and meeting other personal expenses.

The total outstanding on this count is Rs 1,444 crore, for term loans ranging from up to Rs 2 lakh to above Rs 5 lakh.

Small farmers owe Rs 2,642 crore worth term loans to banks. The figure for all farmers, including those with more than five acres, stands at Rs 13,150 crore.

The total crop and term loans stand at Rs 72,771 crore! And this figure does not include loans taken by landless farmers, farm labourers and by farmers from arhtiyas (moneylenders).


According to sources in the agriculture department, the government may also include term loans of up to Rs 2 lakh taken by marginal and small farmers in the waiver. “The decision to write off crop loans first was taken as marginal and small farmers take advances from arhtiyas to pay off crop loans. They avail crop loans twice a year. Since the second crop loan cannot be availed without paying the first, they take money from arhtiyas to pay the first off. So if crop loans are written off, the cycle of debt can be stopped. The government cannot be held liable for loans taken to meet personal expenses,” they said.


While the government is not apologetic about leaving out farmers with more than five acres of land and money lent by arhtiyas, it is clear the Congress did not do its homework well in a hurry to promise the moon to farmers, especially when poor fiscal health was also a part of party’s poll narrative. The cash pinch is why the government seems to be buying time to notify the waiver. Finance minister Manpreet Badal said the waiver would be notified by next month after a meeting of the finance department with the State Level Bankers’ Committee (SLBC) and the Haque panel.

“We would know how to go about the waiver after the meeting. Once we have the break-up of number of loan accounts that meet the criteria, the government will notify the scheme,” he said.

Dr Haque, when contacted, sought time to give details. But he did not respond to calls later.


Congress MLAs from Gurdaspur district, where Lok Sabha bypoll is due later this year, sought clarity on the debt waiver in their recent meeting with the CM.

“A majority of landholdings in Gurdaspur is below five acres. We can tell farmers the Congress has reduced their debt liability in first 100 days of coming to power. But we do not have any clarity on the issue ourselves.,” an MLA from the district said.

First Published: Jul 16, 2017 09:14 IST