Even as the Congress-led Punjab government prepares to implement a farm loan waiver scheme, the Punjab Arhtiya Association and several banks have decided to curtail loan advances they give to farmers for the fear that recovery could be affected as the government may not repay their amount soon.
Arhtiyas, or commission agents, are an important source of credit for farmers in Punjab.
The association, in its recent meeting, has decided to curtail the loan advances given to farmers by 10 per cent. This means, if a farmer is asking for a loan of Rs 5 lakh, he would be given 10 per cent less.
Punjab Arhtiya Association president Ravinder Singh Cheema said they had also decided to slash the advances given to farmers by 10 per cent since they fear their principal would not be repaid by the government any time soon even as farmers would be reluctant to repay the principal amount as they wait for the waiver.
A senior bank official said that after the announcement of loan waiver, farmers had stopped paying the principal amount. “We have decided not to cut loan advances for those who are not paying the principal amount,” said an official. The last farmers’ indebtedness survey for agricultural year 2014-15 (July-June) pegged the total outstanding debt of farmers in Punjab at around Rs 69,355 crore.