Bharatpur, Rajasthan: Rural India is split between the debt haves and have-nots as the Union government speeds its farm loan write-off.
In eastern Rajasthan, where less than four out of 10 farmers are defaulters, the heartburn among those who have paid back their loans and are gaining nothing from the debt waiver could even hurt, instead of benefiting, the Congress party-led United Progressive Alliance (UPA) in the next state assembly election.
Expecting relief: Puran Singh Saini, a resident of Indrauli village in Bharatpur, took a loan for a tractor and still has to return a small amount which he hopes will be written off under the loan waiver scheme.
In Deeg, some 30km from Bharatpur, Deepak Bansal is agitated. A graduate who chose to join his parents in farming, he has been promptly paying instalments since 2003 on a Rs2 lakh loan he took to buy a tractor. “In the past five-six years, I have struggled to pay my dues despite several odds,” says Bansal. “Suddenly I get to hear that my fellow farmers who have not paid are beneficiaries of a waiver. So much for them and nothing for us!”
Farmers in the region, which consists of Bharatpur, Dholpur, Sawai Madhopur, Karauli and Alwar districts, have borrowed heavily from banks. But, according to officials of top national banks, less than 40% of them have defaulted on loan payments.
In the four districts of Bharatpur, Dholpur, Sawai Madhopur and Karauli, the number of farmers expected to benefit from the debt write-off is between 25,000 and 30,000, said a public sector bank official in Bharatpur who asked not to be named.
“This means only some 35% of the farmers here qualify for the benefit being offered by the government. There is a lot of discontentment among those who have been paying their dues on a regular basis,” he said.
Punjab National Bank, State Bank of India, State Bank of Bikaner and Jaipur, Bank of Baroda and Rajasthan Grameen Bank are some of the banks that have advanced agricultural loans to farmers in eastern Rajasthan districts at a lending rate of 7%.
In other parts of Rajasthan where fewer farmers have defaulted on loan payments, the resentment could be worse than in the east.
“Bharatpur circle has one of the highest claimants under the loan waiver scheme in Rajasthan,” said the regional head of a bank. “It is much better in districts such as Jodhpur, Ganganagar and Jaipur. In these districts farmers getting waiver and relief will be less than 15% of the total farmers.”
Farmer Hargovind, in Deeg, borrowed using a Kisan Credit Card offered by banks to finance the purchase of agricultural inputs. He and fellow farmer Chandan Ram, who borrowed money for a tractor, have been regular with payments. They both say the whole debt-waiver exercise is “pure politics.”
“This attempt of the Congress might just backfire as 75% of the farmers in my branch are regular in paying their dues,” says the manager of a bank branch in Deeg. “The Congress may just lose their votes.” The debt writeoff is taking place ahead of assembly elections due to be held in Rajasthan by this year-end, before general elections take place next year.
A banker in Bayana said more than 65% of farmers who borrowed from his branch had been making repayments on time.
“Over 50% of defaulting farmers are wilful defaulters who just squander their loan amount and we have been maintaining a good recovery mechanism where we would personally go and convince farmers on how repayment will help them take fresh loans,” he says. “The entire system has collapsed now.”
Shamsher Subhraj, of Tyra village, harvested a good wheat crop this year after a bad one last year. He was all set to pay up his debt in full — until he heard that the government will pay one-third of his dues.
A farmer from Talimpur village, who took a Rs2 lakh loan for sinking a borewell on his farm, was also all set to start paying off his dues. “I could not start paying back last year because the crop failed,” said the farmer, who identified himself only as Ashok. “This year, with early rains, I was thinking of paying off but now I am expecting to qualify for the loan waiver.”
Just 2km away, in Indrauli village, farmers who defaulted on loans have better houses, tractors and borewells compared with those who paid on time.
Under the debt waiver, total outstanding dues of small and marginal farmers who owned up to 2ha of land between 1997 and 2007 will be written off. Those who owned more land during the period will get a partial waiver.