While Maha govt delivers on loan waiver, crop credit dips further


Mumbai: Even as more than Rs 800 crores has been released as the first instalment of the Maharashtra government’s loan waiver scheme, the state is seeing sharp decline in giving crop loans.

The state has recorded a negative institutional farm credit growth for the 2017-18 kharif season. The Chief Minister Devendra Fadnavis had announced that the target behind his government’s farm loan waiver scheme, announced on June 24 this year, was to bring more farmers in the institutionalised crop credit net. However, the latest data compiled by the Bank of Maharashtra, which is the convenor of the State Level Bankers’ Committee (SLBC), a representative body of all lending institutions, reveals that the state has achieved only 54 per cent of the credit target set for this year’s kharif season.

While a total credit plan of Rs 40,547 crore was formulated for the 2017-18 kharif season, the data reveals that only about Rs 25,243 crore was extended. “The overall achievement shows negative year-on-year growth. Achievement during the same period of the previous year was to the extent of 76 per cent,” said a senior official.

In the 2016-17 kharif season, the same lending institutions had extended a farm credit of Rs 28,598 crore, against the season target of Rs 37,677 crore. In other words, lesser number of farmers were covered under the institutionalised crop credit in 2017-18 as compared to 2016-17.

Maharashtra is primarily a kharif cultivation state with most of the state’s commercial crops and foodgrains sown during the kharif season. Further, if the SLBC convenor is to be believed, the farm loan waiver announcement may have played a role in the negative growth. “Reasons for the low credit offtake this year can be attributed to the announcement of the farm loan waiver scheme by the Government of Maharashtra,” states the agenda note, which was prepared by the Bank of Maharashtra, for an SLBC-level review of the progress of lending for crop loans.

Incidentally, almost all forms of banking agencies — public sector banks, private banks, state level cooperative banks, regional rural banks and district cooperative banks — have recorded a negative year-on-year growth, reveals the data.

The Congress on Monday targeted the state government over the data. Party leader Sachin Sawant blamed the negative growth on the “government’s delay in rolling out the loan waiver”. “This could spell doom for the farmers in the state. The government is aware that the lack of access to institutional credit drives farmers to private money lenders. Indebtness to private moneylenders has been one of the root causes of suicides and agrarian crisis in the state. Yet it has itself created roadblocks in disbursal of institutional credit to farmers,” Sawant alleged, while blaming the “faulty design” of the farm loan waiver scheme for the delay in implementation.

Countering the Congress’ accusation, a senior government source, who wished not to be named, refuted claims there had been an inordinate delay in rolling out the loan waiver. “When the Congress-NCP government had announced the loan waiver in 2008, it had taken them more than a year to implement it. We’ve implemented it within three months.

We have also checked the irregularities that were seen when the previous government implemented the waiver.”
Sources, however, conceded that only 40 per cent of farmers who had availed institutional credit last season had paid their dues till July 31 this year.