Chandigarh tops India’s farm loan debt, but city’s farming is limited
Haryana has 36.63 lakh loan accounts with outstanding loans of Rs 1,00,013 crore, ranking seventh nationally
Fresh data on outstanding agricultural loans, tabled in the Rajya Sabha, has exposed sharp disparities in the average debt burden per farmer across states and Union Territories, with Chandigarh emerging as the most striking anomaly.
Despite having negligible cultivable land, Chandigarh tops the country in per-account agricultural loans. About 8,000 agricultural loan accounts in the Union Territory have availed loans worth Rs 3,068 crore, translating into an extraordinary average of Rs 38.35 lakh per account — the highest in India.
Experts say this does not point to agrarian distress but rather highlights a structural distortion in agricultural credit in high-value urban and peri-urban regions. Agricultural land in and around Chandigarh commands prices running into several crores per acre, allowing landowners to offer substantial collateral and access large agricultural loans, often unrelated to actual farm output. Economists and auditors have repeatedly flagged concerns that such concessional agricultural loans — carrying benefits like low interest rates, interest subvention and periodic waivers — are sometimes diverted towards real estate, business expansion or financial investments, with weaker oversight in high-value regions.
The distortion is further amplified by the small number of agricultural loan accounts in Chandigarh, where even a handful of large-ticket loans can dramatically inflate per-account averages.
As per the data tabled by Minister of State for Finance Pankaj Chaudhary in the Rajya Sabha on December 16, in a written reply to a question by MP Mukul Balkrishna Wasnik, Delhi ranks second in per-account agricultural loans, with 4.14 lakh accounts drawing Rs 26,998 crore, averaging Rs 6.52 lakh per account. As in Chandigarh, questions persist over how such large agricultural loans are being utilised in a largely urbanised region with limited farming activity.
Among major agrarian states, Punjab’s figures underscore deepening farm distress. The state has Rs 25.23 lakh agricultural loan accounts with outstanding loans of Rs 97,471 crore, placing it fourth nationally with an average debt of Rs 3.86 lakh per farmer.
Advocate Kamal Aanand of Sangrur, who analysed the data, said the contrast between urban and agrarian regions was stark. “It is beyond explanation how an average agricultural loan of Rs 38.35 lakh could be justified in Chandigarh, where there is hardly any land for farming. The same applies to Delhi. It appears that low-interest agricultural loans are being diverted for non-agricultural purposes, which calls for a deeper probe,” he said.
Comparatively, neighbouring Haryana has 36.63 lakh loan accounts with outstanding loans of Rs 1,00,013 crore, ranking seventh nationally with an average of Rs 2.73 lakh per account — Rs 1.13 lakh lower than Punjab. “This shows Punjab’s failure to adequately safeguard its farmers through sustainable farming practices and long-term policy measures,” Aanand added, expressing concern over rising farmer suicides linked to debt.
At the other end of the spectrum, Meghalaya reports the lowest average agricultural loan in the country, at Rs 76,966 per account, with 1.45 lakh accounts availing loans worth Rs 1,116 crore. Jharkhand, often categorised as a backward state, also records a low average of Rs 78,350 per account across 28.25 lakh accounts, amounting to Rs 22,134 crore. These figures, experts say, highlight the uneven access to institutional credit and the sharp regional imbalances in farm financing.
Overall, India’s agricultural sector remains heavily credit-dependent. A total of 17.42 crore agricultural loan accounts have outstanding loans of Rs 31.36 lakh crore, averaging Rs 1.80 lakh per account. In terms of total loan volume, Tamil Nadu leads with Rs 4.94 lakh crore across 2.56 crore accounts, followed by Andhra Pradesh with Rs 3.76 lakh crore.
The contrasting patterns — urban regions topping per-account loan averages while agrarian states struggle with mounting debt — have raised questions about the targeting and monitoring of agricultural credit, said Kamal Anand.
