Press Information Bureau

Government of India

Ministry of Finance

18-May-2012 16:59 IST

Task Force on Farmers Loan

The Government of India had constituted a Task Force, under the Chairmanship of Shri U.C. Sarangi, the then Chairman, NABARD to look into the issue of a large number of farmers, who had taken loans from private money lenders, not being covered under the loan waiver scheme.

The Task Force has submitted its report to the Government in June, 2010. The Task Force’s main recommendation inter-alia include the following:-

Policy measures for addressing the issues of farmer’s indebtedness to money lenders and measures to provide relief to farmers.

(i) Various measures including the Kisan Credit Card (KCC) Scheme to ensure coverage of small and marginal farmers, tenants farmers, share croppers and oral lessees by the institutional credit card fold, to reduce their dependence on informal sources.

(ii) On legislation regarding loans from private money lenders and the need for a grievance redressal mechanism at the District level which is accessible to both money lenders and farmers.

(iii) The Interest Subvention Scheme is being implemented by the Government of India since 2006-07 to make short-term crop loans upto Rs. 3 lakh for a period of one year available to farmers at the interest rate of 7 percent per annum. The Government of India has since 2009-10 been providing additional interest subvention to prompt payee farmers. The additional subvention was 1% in 2009-10, 2% in 2010-11 and 3% in 2011-12. The Government has in the Budget speech of 2012-13 announced continuation of the scheme in 2012-13

Banks have been advised to issue Kisan Credit Cards (KCCs) to all eligible farmers and General Credit Cards(GCCs) to non-farmers. A new scheme for KCC has been circulated by NABARD/RBI.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Lok Sabha today.

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DSM/SS/SL

Interest subvention scheme expansion ensures subsidised short-term agricultural credit; KCC coverage and lender grievance redressal recommended. The Task Force recommended expanding institutional credit through the Kisan Credit Card scheme to cover small and marginal farmers, tenants, sharecroppers and oral lessees, issuing General Credit Cards for non farmers, legislating on private moneylender loans, establishing district level grievance redressal accessible to lenders and farmers, and continuing the Interest Subvention Scheme for short term crop loans with additional subvention for prompt payees, with banks directed to issue KCCs under revised NABARD/RBI guidelines.