Rs 47k cr Punjab crop loan limit, Rs 74k cr given. Where?

Amaninder Pal

Tribune News Service

Chandigarh, February 17

The yawning gap between the crop loan availed by Punjab farmers last fiscal and the maximum crop loan that can be given annually against the state’s entire cultivable land is posing a riddle to banking experts and 

agricultural economists.

According to National Bank for Agriculture and Rural Development (NABARD) experts, Rs 47,708 crore is the maximum loan that the entire farming community in Punjab can collectively avail of in a year. This amount, they say, is for both sowing seasons — rabi and kharif. 

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What is intriguing is that last fiscal, crop loan amounting to Rs 74,093 crore was given to Punjab farmers, which is at least Rs 26,385 crore (35 per cent) more than the state’s maximum loan potential. “There is a difference of Rs 26,385 crore. The question is into what has this amount been ploughed? It is likely that most of it has been used for non-farming and non-productive purposes, further worsening the farmers’ economic plight,” said a senior NABARD officer.

Experts blame the loan diversion to the prevalent practice of multiple borrowing, whereby an individual raises loan from various financial sources against the same piece of agriculture land. “This is a serious issue, pointing to a massive diversion of crop loan for non-agriculture purposes, even as borrowing from multiple sources is pushing the small farmer into a debt trap,” said a senior economist. 

As per the report of the State-Level Bankers Committee (SLBC), that coordinates with the state government, crop loan was taken by at least 25.6 lakh account-holders during last fiscal whereas there are in all 19.35 lakh cultivators in Punjab. The number of active KCC bank accounts is about the same (19.63 lakh).

“This indicates that a large number of farmers are resorting to multiple borrowing, which is deterimental to their fiscal health, and that loans taken to raise crops is being used for other purposes,” said Dr PM Ghole, Chief General Manager, NABARD, Regional Office.