At Rs 2.52L per farmer, Punjab leads nation with highest pending agricultural loans

Neeraj Mohan

New Delhi, December 13

One of the biggest foodgrain producing states of the country, Punjab, stands at the forefront with an average outstanding loan of approximately Rs 2.52 lakh per operative Kisan Credit Card (KCC), making it the leader in terms of outstanding loan averages in the country.

According to data on outstanding loans provided to farmers through Kisan Credit Cards, Punjab shoulders a substantial debt burden of Rs 55,428 crores to around 21.98 lakh agricultural families, surpassing the national average of Rs 1.20 lakh per KCC holder.

Haryana is at the second position with outstanding debts of total over Rs 50,045 crores for 22.86 lakh farmers, the average debt being Rs 2.18 lakh.

Gujarat follows closely with an average debt of Rs 2.06 lakh among its 30.18 lakh KCC beneficiaries. Rajasthan, with 65.40 lakh KCC holders, secures the fourth position, carrying an average debt of Rs 1.52 lakh per KCC beneficiary. However, Uttar Pradesh has the highest 1.07 crore beneficiaries of the KCC and the outstanding amount is Rs 1.28 lakh crores.

Interestingly, the Union Territory of Chandigarh, with 1,475 beneficiaries of KCC with an outstanding debt of Rs 99 crore, boasts an average outstanding debt of Rs 6.71 lakh per household. In a written reply in the Lok Sabha, Union Minister for Agriculture and Farmers Welfare Arjun Munda disclosed that there were approximately 7.34 crore operative KCC holders with an outstanding amount of Rs 8.85 lakh crores as of March 31.

The figures of the breakdown of institutional credit disbursed to farmers for crop and term loans from April 1, 2022, to March 31 reveals significant disbursements of Rs 16.76 lakh crore to commercial banks, Rs 2.36 lakh crore to cooperative banks, and Rs 2.42 lakh crore to Regional Rural Banks (RRBs). The cumulative disbursement during this period amounts to Rs. 21.55 lakh crore.

The Kisan Credit Card (KCC) scheme, introduced in 1998, facilitates farmers in purchasing agricultural inputs and drawing cash for their production needs.

Under this scheme, farmers can avail themselves of a subvented interest rate of 7%, with an additional 1.5% interest subvention provided to financial institutions.

This translates to short-term loans for agriculture and allied activities up to Rs 3 lakh being available to farmers at an effectively reduced interest rate of 4% per annum, with an extra 3% Prompt Repayment Incentive (PRI) for timely repayment of loans.