Punjab government to streamline money lending to farmers, fix loan limit

The Bill, aimed at further “relieving the state’s farmers from the vice of debts”, proposes a series of measures to protect the interests of the farming community, saving them from the clutches of unauthorised money lenders who charge exorbitant rates to give unlimited amounts as loans, said an official spokesperson.

punjab Updated: Aug 23, 2018 22:32 IST
Hindustan Times, Chandigarh
Punjab,punjab government,farmers
The state cabinet headed by chief minister Captain Amarinder Singh on Thursday approved the draft of the Punjab Settlement of Agricultural Indebtedness Bill, 2018, to be introduced in the monsoon session of the state assembly, beginning Friday.(Representative Photo)

The Punjab government has decided to streamline the system of money lending to farmers by fixing a limit on the loan on per acre of land and the rate of interest.

The state cabinet headed by chief minister Captain Amarinder Singh on Thursday approved the draft of the Punjab Settlement of Agricultural Indebtedness Bill, 2018, to be introduced in the monsoon session of the state assembly, beginning Friday.

The Bill, aimed at further “relieving the state’s farmers from the vice of debts”, proposes a series of measures to protect the interests of the farming community, saving them from the clutches of unauthorised money lenders who charge exorbitant rates to give unlimited amounts as loans, said an official spokesperson.

At present, most of the 15 lakh farmers and an equal number of agriculture labourers are under debt. Of these, 10 lakh farmers owe about Rs 9,500 crore to banks and other financial institutions, which the government has promised to write off. However, there are no exact estimates of farmers’ debt towards arhtiyas (private money lenders).

Highlights
  • Price stabilisation fund to be created for MSP
  • The cabinet also approved another bill for creation of a price stabilisation fund to ensure state farmers get minimum support price (MSP) for their produce. The Bill aims to protect the interests of farmers in the event of a sudden fall in prices of certain agricultural commodities. The amendments will be made to Section 25 (A), 26 and 28 of the Punjab Agricultural Produce Markets Act, 1961, said the spokesperson.
  • The changes will ensure that a fraction of commission charged by arhtiyas goes into the produce price stabilisation fee. The rules pertaining to market development fund and market committee fund are being amended by inserting new clause (xxii) after Section 26 and 28 of the Punjab Agricultural Produce Markets Act, 1961, to enable use of these funds in the price stabilisation fund. The step, said the spokesperson, has been taken in view of the pitiable condition of farmers in the state, pushing many of them to suicide in the recent past.

With the enactment of the law, only licensed money lenders will be allowed to advance the money, with lending by others deemed to be illegal. Only these licensed money lenders will be allowed to move the debt settlement forums, which will be headed by commissioners. The lender would be required to submit proof of the amount lent to the farmer.

It has also been decided to bring down the total number of debt settlement forums from 22, as per the existing Act passed in 2016, to five, said the spokesperson. The new forums would be constituted at divisional levels. This would help in ensuring a more systematic approach to handling farm debt cases. The decision to amend the existing law on farm loans has been taken to curb the growing trend of agricultural indebtedness, resulting in mismatch between the prices of agricultural inputs and minimum support price of agricultural produce.

The farmers raise loans from both institutional and non-institutional resources. However, while the institutional loans are regulated through various special legislations governing the institutions providing such loans, non-institutional loans are largely unregulated having no mechanism for redress of debtor’s grievances.

Cabinet observes 1-minute silence in memory of Kuldip Nayar

The cabinet observed one-minute silence as a mark of respect to veteran journalist and noted writer Kuldip Nayar.

The cabinet described Nayar as a multifaceted personality, who served in different capacities as a diplomat and parliamentarian. Besides being a fine human being, he was an erudite author, it noted.

Recalling his remarkable services as a son of Punjab, the cabinet said that Nayar would be remembered by one and all for his efforts in strengthening Indo-Pak ties, besides fostering love, peace, brotherhood and amity between the people of both nations.

First Published: Aug 23, 2018 22:31 IST