Maharashtra Crop Loans: Govt-Banks Standoff Affects Farmers?

Maharashtra’s lakhs of farmers have been relieved with the onset of monsoon rains amid the worst ever drought the state has faced in the recent times. They are now looking forward to the help from the state government so that they can overcome financial stagnation of two years, at least. A part of this help will be the smooth flow of loans for the Kharif season.

However, the banks have not achieved the targets of loan distribution till date.

Before every Kharif season, the chief minister holds a meeting with the entire financial machinery. CM Fadnavis held such a meeting in June this year and had appealed to the bankers – nationalised as well as private – to complete the target of loan distribution in agriculture. For this year, this target is Rs 71,762 crore – Rs 30,778 crore of which is for nationalized banks, Rs 27,918 crore for private banks and Rs 13,066 crore for district cooperative banks.

NewsClick has learnt, however, from the sources that as against the target of Rs 71,762 crore, only Rs 25,944 crore have been distributed so far, amounting to just about 36%. In the worst performance by the nationalised banks, loan amounting to only Rs 5,331 crore has been distributed – amounting to just about 14% of the target. The commercial banks have managed to achieve loan distribution of only Rs 4,899 crore, which comes to 17% of the distribution target. However, by giving loans of Rs 7,641 crore, the district cooperative banks have achieved 58% their target – in a significantly better performance when compared with the nationalised and commercial banks.  

This lag also has to do with the interest on the loans which were waived off under the loan waiver scheme by state government. Maharashtra government had announced a loan waiver of Rs 34,022 crore in June 2016. The scheme has not yet been closed officially, as all the farmers have not yet received the benefit. But the banks are asking the state government to deposit the amount of interest on these loans waived. This interest will be for the duration between the date of announcement of loan waiver and the date of actually waiving off the loan amount. As the state government has asked the banks to raise their share in the scheme, the standoff between both the sides is hurting the farmers’ interests.

Meanwhile, state’s Marketing and Cooperatives Minister Subhash Deshmukh has publicly expressed dissatisfaction over the stance taken by commercial as well as the nationalised banks. “It is true that a few nationalized banks are taking an adamant stand over the loan process. State government is taking daily follow-up of the loan distribution and clearance of loan proposals. But we appeal to the banks that they should look at the larger interest of the state as well as farmers now and expedite the process of loan distribution,” said Deshmukh.

According to sources, CM Fadnavis too has slammed the bankers in the meeting for not clearing loan proposals. He has also issued orders to district collectors, asking them to take strong action against the banks that are refusing crop loan to the farmers. Despite this, the loan distribution numbers in second week of July have not been satisfactory.

Farmers’ leaders are holding the state government responsible for this mayhem. “This government should accept that the loan waiver scheme has made a huge mess. A large chunk of farmers is already not benefitting from the scheme. The state government should have cleared these issues much before the monsoon so that it could have helped the farmers. It will be better if the government now declares district-wise loan numbers and gives the ratio of total proposed and cleared loans,” said former Member of Parliament and farmers’ leader Raju Shetti.

All India Kisan Sabha’s state secretary Dr Ajit Nawale said that the responsibility of the interests has to be shouldered by state government only. “Government announced loan waiver of Rs 34,000 crore. Till now, the total amount spent on the scheme is between Rs 15,000 and 17,000 crores. So, the government does have the rest of the money to spend on the interest. By pointing fingers at the bankers, the state government is trying to run away from its responsibility. This is finally affecting the farmers of the state. So, we demand immediate clearance of loan interests so that farmers won’t have to wait further,” said Dr Nawale.

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