Sara village (near Modinagar): He is a big farmer with 10 acres. He had taken a loan of Rs 2 lakh from Punjab National Bank through the Krishi Card scheme in February 2007 and has an overdue of Rs 1.6 lakh. Under the one-time settlement (OTS) scheme for big farmers, 70-year-old Baleshwar Tyagi is likely to be eligible for a 25% relief of the ‘eligible amount’ under agriculture debt waiver and relief scheme.
The guidelines also say relief will be given to loans disbursed up to March 31, 2007 and overdue as on December 31, 2007 and remaining unpaid until February 29, 2008.
“Even if the bank includes me in the (agriculture debt waiver and relief) scheme and gives some benefit, I will not avail the benefit. I am proud to be a farmer and will repay my loan. Farmers here are not happy with the government because they have played Politics with us by trying to create divisions between big and small farmers. Then they force the banks to follow their orders,” says Tyagi.
However, Vipin Tyagi, a 35-year-old small farmer owning five acres in Sara village, is upset for another reason. Though he has repaid all the loans taken from 1998 on time, he complains that the government has not offered any benefits to him. “They have given benefits only to the habitual defaulters, who will now be given fresh loans. But despite being good customers of the bank, people like me get no incentives.”
Also, there are genuinely distressed small farmers like Harprasad (60), who suffered a crop failure in his 1.5 acres due to pests and water logging. He had taken a loan of Rs 60,000 a year ago through his Krishi Card from PNB. “Whenever bank officials come to my house for recovery, I am helpless. Not just crop failure, I also have two daughters to be married off. But I do not know if my name will be on the list of beneficiaries that will be put up by the bank.”
Owning three acres, 50-year-old Mohammaed Yamin of Janikhurd village near Meerut is also anxiously waiting to see if his name is included in the list to be put up by the PNB. He had taken a loan of Rs 90,000 two years ago, but was unable to repay mainly due to the medical expenses of over Rs 2 lakh he incurred in getting treatment for his daughter, whose severe leg injury had turned septic. “I have the medical proof. Also my harvest was affected due to pests. I can neither repay the principal amount nor the interest. I will wait to ensure that my name is included in the list as I have no other option now,” he says.
Reflecting the divide between large and small farmers, 42-year-old Sushil says, “This waiver will benefit only big farmers who have all the necessary connections and money power,” he says.
Well, if the government has any illusion that it can bank on its ambitious Rs 71,680-crore farm debt relief and waiver scheme to easily return to power, these voices from villages that are a stone’s throw away from the capital can be a wake up call. For it is only a sneak peak into the massive implementation problems regarding the scheme that the banking system as well as the government would face, even if their plan is to bring about greater financial inclusion through the largesse.
Praveen Jindal, village head of Janikhurd, says, “Not a single farmer knows about the exact details of the scheme or its guidelines. All those who have taken loans from banks or from moneylenders also think that their debt will be waived off. But they do not know that it is for bank loans and that too benefits will only be given to those with their names in the list put up by the bank. Many of them do not even know about the list or the kind of loans that will be benefited by the scheme.”
PNB executive director JM Garg says one of the main objectives of the scheme is to help the farmers escape from the clutches of moneylenders and bring them into the banking net. PNB has now started putting up posters with details of the scheme at prominent places in villages to ensure proper awareness. Another important message that the bank is trying to put across is that the scheme is meant only for genuinely distressed farmers and that they should ensure that the culture of repayment is not affected, he added .
“Some farmers who were repaying their loans are now reluctant to repay thinking that their debt will be waived off too,” he says, adding that “In case of any doubts regarding the scheme, anyone can call up our head office in Delhi.” The bank has given out the contact numbers of all the concerned officials to the villagers. “It is important that all eligible accounts are included, while at the same time, none of those who are not eligible should be included,” he says. The bank now aims to put up separate lists of names under crop loans, term loans and those meant for full waiver and for partial relief.
Pointing out that 60% of the villagers do not have a bank account, he says that in the next five years it is important that every villager is linked to the banking system. Other officials said the loan waiver has killed the farmer’s spirit to repay and the shame associated with getting a notice from the bank regarding any default. “Banks will have to do a lot of work to educate the farmers on why repayment of loans is important for the banking system and for them too,” an official said.
On the other side are the farmers who depend on money lenders who give loans without much paper work .
KamalSingh (70), who owns around five acres, says, “I have not taken any loan so far. I don’t understand the procedures involved. Sometimes my sons take money from moneylenders to run the farm.”
Another farmer, Gajendra (45) of Bhoopgadi village says, “If one has to get a loan of Rs 50,000, the banks say they will be able to give only around Rs 44,000 as the remaining goes as filing fees and the advance interest. Also one has to submit many documents, affidavits and stamp fees to get a Kisan Credit card to avail these loans.” Authorities and lawyers take money for every sign they given on the documents. Then we have to pay bribe also. Just to get the Kisan Card it self takes over six months of running from pillar to post. It is better to approach the moneylender who gives you money instantly and that too without any documents and the other fees involved, he adds.
Another aspect of the scheme is its implementation. Since this is first time in the history of the bank that such a massive exercise is given to them, all the officials see this as their biggest challenge. The bank’s officers, especially in the rural and semi-urban areas, are now working overtime to try and finish by June 22 the identification of borrowers eligible for the scheme.
PNB circle head ( Meerut ) BP Ray says, “Identification of the eligible farmer and their eligible amount are absolutely crucial from the point of view of the implementation of the scheme. Therefore each officer will have to understand the correct interpretation of the guidelines. Each farmer account will have to be recast separately to find out exact amount eligible for benefit.”
“Though we have computerised records, since the eligible loans under the scheme starts from 1997, we have to also go through several manual records, especially regarding ownership of land,” he says. Also there are technical problems. For instance, we have to go through each loan account separately because as per RBI guidelines, we had earlier treated two separate accounts of a farmer as NPAs (non-performing assets), even if there is only one of them is NPA and there is no overdue in the other account. Now the loan account with no overdue will not get benefit. Therefore such accounts will have to be found out.Besides, if a farmer, though owning over 10 acres, if he had indicated that he owns only two acres, who is going to verify it andthe veracity of the title deeds?” he adds. The general impression that the villagers have is that the government has waived off all their debt.
