Punjab govt decision on farm loan waiver likely after 15 June
Punjab’s total outstanding farm loan is Rs72,770 crore, of which Rs59,620 crore are crop loans and the rest (Rs13,150 crore) are term loans,
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New Delhi: A Punjab government committee studying a promised farm loan waiver will submit its report by 15 June, one of its members said.
“The committee members have met twice and discussed possible scenarios of loan waiver and how much it may cost the government. After a meeting next week, we will give our recommendations to the chief minister by 15 June,” he said, asking not to be identified.
According to data available with the panel, Punjab’s total outstanding farm loan is Rs72,770 crore, of which Rs59,620 crore are crop loans and the rest (Rs13,150 crore) are term loans, he said. “The loan waiver will be limited to short-term crop loans and we are unlikely to recommend waiving term loans.”
Another official familiar with the development said that the waiver scheme is likely to be limited to small and marginal farmers (owning less than 5 acres of land) and the government is likely to announce a package after the state assembly session begins next month.
Latest data from a report prepared by the state level bankers’ committee showed that 1.7 million small and marginal farmers from the state had availed loans totalling Rs36,600 crore.
On Tuesday, chief minister Amarinder Singh said in a series of tweets that his government will act soon on the promised loan waiver.
“I appeal to farmers not to resort to suicide... I promise that their debts would also soon be waived,” Singh said. “No question of going back on debt waiver promise, committee is on the job.”
The panel is headed by former chairman of Commission for Agricultural Costs and Prices, T. Haque, and has Pramod Joshi, South Asia director of the International Food Policy Research Institute, among members.
In its election manifesto, the Congress had promised a waiver of agricultural loans, raising compensation for crop loss, a new farmers’ pension scheme and Rs10 lakh financial assistance to the family of farmers who have committed suicide.
Uttar Pradesh, which went to elections along with Punjab, waived a staggering Rs36,359 crore of farm loans in early April, following up on an electoral promise.
Despite a bumper harvest this year, farm suicides in Punjab have continued unabated. According to a report in The Indian Express on 22 May, at least 21 indebted farmers from the state committed suicide between 1 April and 15 May.
“Stagnant productivity, declining size of land holdings and rising costs of cultivation are the primary reasons driving indebtedness in Punjab,” the committee member said.
On an average, households involved in farming in Punjab had an outstanding debt of Rs119,500, over two and a half times the all-India average of Rs47,000, found a Situation Assessment Survey of farm households published by the National Sample Survey Organisation in December 2014. About 72% of these loans were from institutional lenders like banks and co-operative societies, while the rest was borrowed from moneylenders, relatives and local traders.