Centre offers ~2 trn of loans to farmers, pumps ~30K cr into Nabard
TALKING REVERSE MIGRATION
The Centre on Thursday decided to enlist 25 million new farmers into the cheap credit scheme. This will enable credit flow of almost ~2 trillion to them as part of its Covid-19 relief package.
It also extended additional refinance support of ~30,000 crore to the National Bank for Agriculture and Rural Development (Nabard).
The refinance for Nabard, according to Finance Minister Nirmala Sitharaman, will be over and above the existing ~90,000-crore refinance facility that Nabard was to extend this year to regional rural banks (RRBS) and cooperative institutions for crop loan requirement of farmers.
The additional credit largesse for Nabard will be used to push liquidity through RRBS and co-operative institutions, and expand the ongoing drive to enlist 25 million new farmers for concessional credit.
Sitharaman in her 2020-21 Budget speech had assured all 100 million Pm-kisan beneficiaries of cover under the Kisan Credit Card (KCC) scheme that lets farmers take loans at concessional rates.
Under the scheme, it has sanctioned 2.5 million new kisan credit cards during the lockdown period and sanctioned loans amounting to ~25,000 crore.
The concessional loan programme — under which interest subvention is given on timely repayment of crop loan — has been extended till May 31 for calculation of timely repayment tenure.
These measures, say critics, do nothing to address the fundamental malaise of low prices and falling demand. The step to enlist 25 million new farmers into the existing concessional loan scheme does not have a time period.
In the case of additional finance to Nabard, critics asked how banks — which lend at 4.8 per cent interest — would recover from farmers when their agri operations have run into losses?
“To me a better and more viable way would have been to waive existing interest on shortterm crop loans and term loans for agriculture, along with giving states more funding for central schemes, as they are starving for funds, while at the same time ensuring minimum 10 days work under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) per month for the rural poor,” Ajay Vir
Jakhar, chairman, Bharat Krishak Samaj, told Business Standard.
In the case of MGNREGA — providing succour to millions of migrant labourers returning home — the government claimed so far, 146.2 million persondays of work has been provided under the scheme. This is 40-50 per cent more than the same period last year, but experts said in reality the work generated in April was more than 40 per cent less than last year, while in May (till May 13), it is almost 10 per cent less, compared to the same period last year.
“Thursday’s announcement shattered the hopes of financial assistance to small and marginal farmers. Extending the two-month moratorium on crop loans is an immediate benefit. The other announcement on increased credit flow and KCC numbers may be of future advantage, if any,” said Sudhir Panwar, former member, Uttar Pradesh Planning Commission.