The state government has set a target to bring 20 lakh farmers, who have never taken loan, under the state credit plan 2016-17. The proposal has been conveyed to the Centre and would require an expansion of the plan from the current Rs 53,000 crore to Rs 68,000 crore.
In Maharashtra, only 45 per cent farmers avail loans from the nationalised or district cooperative banks. Alarmed by the sizeable number of small and marginal farmers being deprived of bank loans, Chief Minister Devendra Fadnavis presented the subject before Prime Minister Narendra Modi, indicating that farmers covered under the loan credit plan should increase from 45 per cent to 80 per cent.
While urging the prime minister and Union finance ministry to bring out a mechanism to facilitate bigger loans from the financial institutions, he said, “Farmers cannot be turned down on the conditions of bad recovery. There have to be multiple parameters that need to be incorporated to bring new guidelines, which would serve the welfare of the smaller and marginal farmers more effectively.”
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In Maharashtra — that has registered large number of suicides in 14 districts — the uniform pattern noted was the failure of the farmers to avail fresh loans from financial institutions that made farming a difficult task. Secondly, in absence of assured bank loans from credible institutions, rural villages saw farmers forced to seek alternative mode of borrowings.
It included private money lenders exploiting the farmers by seeking higher rate of interests, which further drove them to poverty and suicides.
The PMO and the Union ministries of finance and agriculture have taken the decision to expand the credit plans across all drought-prone districts in the country. They will take up the matter with Reserve Bank of India and nationalised banks.
While outlining the state’s initiatives through loan restructuring, Fadnavis informed the Centre, “The interest rates on crop loans have been reduced from 12 per cent to six per cent. We have extended the repayment from three years to five years period. In the first year, interest rates on loans have been completely waived. This has helped to bring 17 lakh farmers to avail the loans in just one year.”
However, he indicated, “The financial institutions will have to lend support by evolving models that would spread funds to larger number of farmers, specially small and marginal.”
The Centre-state and financial institutions together will have to find a way forward to make farmers self reliant, he added. Chief Secretary Swadheen Kshtriya said, “At the meeting held in Delhi, the chief minister highlighted two significant aspects. One relates to expansion of the credit plan from present 45 per cent to 80 per cent and second decision was to expand the benefits of Pradhan Mantri Fasal Bima Yogna (PMFBY) to farmers from present 40.8 per cent to 60 per cent.”
Meanwhile, the government has already initiated the process to spread the benefit of crop insurance under PMFBY. Almost 10 to 15 insurance companies are competing for the schemes.