33 C
Sunday, April 18, 2021
Home NEWS Farm loan default rises despite waivers, robust commodity price

Farm loan default rises despite waivers, robust commodity price

In a 12 months marked with critical financial downturn, agriculture has been the one sector which had registered a constructive development. Despite the traction the sector had seen by way of elevated commodity costs, farm indebtedness in Maharashtra reveals no signal of abetting.

As of September 2020, the excellent agriculture loan stood at Rs 1,40,686 crore as towards the Rs 1,31,578 crore of September 2019. Ironically, this enhance comes even because the state completes one other cycle of loan waiver.

For the higher a part of 2020-21, the pandemic led to main disruptions within the nation’s financial life. Officially, India had entered right into a recessionary part with again to again monetary quarters recording destructive GDP development. However, even throughout such gloomy instances, the agriculture sector had recorded constructive growths. Commodity costs had been bullish which had led to farmers incomes good margins.

However, excellent crop loan continues to be excessive, which factors to farmers failing to clear the loans they avail from the banks. Crop loan refers back to the the short-term lending to the farm sector by banks at a subsidised rate of interest of seven per cent. Timely reimbursement of the loans attracts a complete subvention of 6 per cent, thus farmers technically get the loan at simply 1 per cent rate of interest.

Bracketed below the precedence sector, this lending is necessary on banks with the state-level bankers convention (SLBC) – the committee of bankers maintain a observe on agricultural credit score disbursal and its reimbursement.

Analysis of information by the SLBC reveals that of the overall excellent in agriculture sector, Rs 23,550 crore has been deemed as non-performing asset (NPA), which kinds 20.49 per cent of the quantity. For most banks, excessive ranges of NPA within the agriculture sector has been a reason for concern.

This excessive stage of excellent comes even because the state has accomplished one other spherical of loan waiver final within the type of the Mahatam Jyotirao Phule Karja Mukti Yogna. This flagship program of the MahaYuti authorities has seen waiver of excellent loan of Rs 21,991 crore belonging to 29 lakh farmers. Of these, 18.33 lakh farmers got recent finance amounting to Rs 12,124 crore.

Shiv Sena chief from Nanded Prahlad Ingole blamed varied situations and filters leveled by the federal government as the explanation for the elevated excellent within the state.

“What is necessary is a full waiver without any filters which will solve the problem of indebtedness of farm sector,” he stated. Ingole additionally known as for a particular one-time settlement scheme by the Maharashtra Gramin Bank which he stated was as vital lender within the state.

“Most of the other banks have already announced such scheme and we want the Gramin bank also to announce the same. This will help reduce the outstanding in the state,” he added.

Source link

Most Popular