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Farm loan waiver: Yogi govt gets 1.1 million claims worth Rs 40 billion

Virendra Singh Rawat/Lucknow 14 May 18 | 10:44 PM

UP Chief Minister Yogi Adityanath

The Yogi Adityanath government in Uttar Pradesh is processing loan waiver claims of over 1.1 million small and marginal farmers totalling almost Rs 40 billion.

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Farm loan waiver is the flagship scheme of the Adityanath government, which had allocated Rs 360 billion in the budget during 2017-18 for writing off debts of an estimated 8.6 million small and marginal farmers, who had sourced bank loans during 2015-16.

The relief included projected crop loan waiver of about Rs 307 billion with the remaining portion of Rs 53 billion aimed at providing succour to other segments of farmers by writing off non-performing assets (NPA) accumulated by commercial and cooperative banks in the agricultural sector, thus, making such farmers eligible to seek fresh loans.

However, the ambitious scheme could benefit only about 3.6 million farmers, who were given a total benefit of around Rs 220 billion. This included about 126,000 farmers, whose accounts were re-energised by writing off bad debts.

Besides, the scheme had come under the cloud last year, when media reported that a large number of farmers were being given benefit cheques of an amount less than Rs 10, apart from news of field officials demanding a bribe from for approving farm loan waiver applications.

Later, the Adityanath government had provided another window to the eligible farmers, who had been left out, to apply under the scheme afresh in this fiscal. Besides, the state government had also allocated Rs 40 billion for disbursal under the scheme.

So far, about 1.1 million farmers had complained or applied under the scheme, a senior agriculture department official told Business Standard today. “We have received about 1.1 million applications and complaints on the portal, of which we have processed about 150,000 applications, while 400,000 cases have been found ineligible for relief under the scheme and these are likely to be rejected."

The agriculture department had approved loan waiver cases of Rs 9.48 billion and forwarded them to the government. The pending claims are likely to be settled in the next 1-2 months. The individual applications are being verified by the district level committee (DLC) headed by the district magistrate and comprising representatives of banks.

This way, the flagship Rs 360 billion farm loan waiver scheme of the Adityanath government is likely to cap at Rs 260 billion, down by about 28% from its projected purse.

Of the total 23 million farmers in UP, 92.5 percent or 21.5 million fall in the category of small and marginal segments. At the end of March 2016, total agricultural loan outstanding in UP stood at Rs 1.21 trillion, which increased to Rs 1.30 trillion at the end of March 2017. Thus, the projected crop loan waiver of Rs 307 billion was roughly 25% of the total outstanding agricultural loan of Rs 1.21 trillion incurred during 2015-16.

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