Debt relief, not waiver, the way forward: Banks

Ruchika M Khanna

Tribune News Service

Chandigarh, April 27

The Congress’ pre-poll promise of waiving agricultural loans, when translated into a figure, comes out to be Rs 62,931 crore. The way ahead for the state government could be a debt relief rather than a debt waiver.

As a three-member expert group headed by Dr T Haque gets ready to meet here tomorrow (Friday), the state government and the State-Level Bankers’ Committee are ready with the monumental figures regarding the extent of farm loan.

The agricultural debt in Punjab is Rs 77,684 crore, out of which Rs 14,753 crore is the term loan. This means the working capital loan (taken from the public sector, and private, regional rural and cooperative banks) is Rs 62,931 crore, availed by 30.23 lakh farmers. The loan extended through Kisan Credit Cards is Rs 54,521 crore. The amount of loan availed from arhtiyas is still unknown.

The RBI has started a debt swap scheme, wherein farmers can swap up to Rs 1 lakh of debt raised from an arhtiya by availing a loan from a bank. Every year, 3 per cent of the agricultural credit is to be earmarked for the scheme.

In Punjab, the scheme has not cut much ice. Only 47 per cent of the target (Rs 718.75 crore of debt was swapped) could be achieved till December 2016.

Official sources say bankers have indicated that the only way forward for the state government is to take over the entire debt and clear dues of the banks. But the precarious health of the Punjab’s economy does not allow the state to take over such a huge debt burden — with the state’s outstanding public debt already more than Rs 1.78 lakh crore.

Sources say Punjab could adopt a pattern of debt relief similar to the one announced by UP Chief Minister Yogi Adityanath — though the limit of debt relief would be much higher than in Uttar Pradesh.

Dr Haque said during tomorrow’s meeting, experts would come up with ideas of how to go about the task entrusted on them. “We will also discuss the matter with some officers,” he added.