Mathura, UP / Bharatpur, Rajasthan: Early signs from parts of north India indicate their worst fears are coming true, say bankers dealing with farm loan waivers.
A week after putting up the lists of beneficiaries of the waiver scheme, several bank officials in some regions of Uttar Pradesh and Rajasthan say the Union government’s populist initiative will distort credit culture by encouraging wilful defaults. Farmers who serviced their loans regularly are not only resentful but also think the best way to avail of such concessions in the future is to default, they say.
Anxious scrutiny: Farmers read the waiver list displayed outside State Bank of India in Barsana, Mathura, on Friday. Some bankers say the loan waiver has created suspicion among those who have not qualified for it.
“They don’t understand what kind of exercise has gone into making these lists. My bigger fear is that even the regular payers will now get ideas to defer their payments due to banks,” said an official at Syndicate Bank at Nandgaon, 5km from Barsana in Uttar Pradesh.
Another banker, who also did not wish to be identified, said, “In fact, I have been convincing farmers here to diversify into dairy products and horticulture, especially growing flowers that have ready markets in Mathura and Vrindavan. But this loan waiver scheme has created suspicion among those who have not qualified for it. I anticipate poorer recovery from a whole lot in the coming year.”
Loans in allied activities such as poultry farming are eligible only for a 25% loan waiver.
Hansa, a farmer from Barsana village, was in tears when the branch manager of State Bank of India told him that he doesn’t qualify for the waiver. “I was told by my neighbours that the government would waive dues of farmers whose economic conditions are bad. Why is my name not on the list then?” he asked. Standing beside him, fellow farmer and loan defaulter Dhani Ram beamed as his entire loan has been written off. While bank officials tried to convince Hansa that because he has been repaying his dues regularly, he could not qualify, they themselves see no merit in the government’s decision. “There have been several instances when farmers who had not visited even once in two-three years came only to check if their names are on the list,” said another bank official at Nandgaon on condition of anonymity. “After taking fresh loans they may again disappear for you never know how many years.”
According to the scheme, farmers whose loans have been waived are eligible for fresh loans.
Says Vijay Kaur, who works with Lupin awareness self-help group in Rajasthan: “We work hard to convince the farming community to repay their loans on time and avoid indebtedness. Now the government is encouraging indebtedness; this will increase the number of wilful defaulters.”
In Rajasthan’s Tyra village, while farmers such as Ashu, Shamsher, Ishab and Rozgar — who are beneficiaries of the scheme and applying for fresh loans — other cultivators in the village don’t know how to repay their debt. Out of 150-odd farmers in Tyra, only four or five have benefited from the waiver.
Meanwhile, in Bharatpur’s Kaman sub-district, while enquiries keep pouring in, bankers have started working on sanctioning fresh loans.
“I only hope defaulting farmers in this branch, which currently is about 15-17%, don’t grow with this programme,” said an official at Punjab National Bank asking not to be named.
Some 43 million farmers, mostly loan defaulters, have benefited from the waiver. Only small and marginal farmers, who own less than 2ha of land, are eligible.