Beneficiaries pay for delay in loan waiver

HYDERABAD: Crop loan waiver schemes seem to have become a bait to lure voters for political parties in the state, with the latest being the Congress promising Rs 2 lakh crop loan waiver in its “farmers’ declaration” released in Warangal on Friday.

However, the delayed implementation of the scheme by the Telangana Rashtra Samiti (TRS) after coming to power due to fund crunch has been pushing farmers into more trouble as they are forced to bear additional interest burden for the delay in addition to banks declaring their accounts as non-performing assets (NPAs).

The TRS had promised Rs 1 lakh crop loan waiver scheme during the Assembly polls in 2014 and 2018. The party believes that this promise played a key role in coming to power in the state. It took four years to complete the Rs 1 lakh waiver scheme promised in 2014 and the loans of not even 20 per cent of farmers have been waived till date even after more than three years since it was promised in 2018. The government incurred an expenditure of Rs 17,000 crore to waive crop loans of 36 lakh farmers in 2014. It released the amount in six instalments to banks in four years. With this, banks imposed interest on farmers for four years. Banks declared the accounts of those who failed to pay the interest as NPAs and crop loans were denied to them.

As per the promise made in 2018, the government has to waive Rs 1 lakh loans each of 36.68 lakh farmers for which Rs 20,000 crore is required. However, after three years and five months, the government could release just Rs 1,144 crore to waive loans of only 5.66 lakh farmers. Another 31 lakh farmers are yet to receive the benefit.

If this was the situation to waive loans up to Rs 1 lakh, one could easily imagine how much it would take if Rs 2 lakh waiver scheme is implemented. Although the state government is sanctioning funds in the budget every year for crop loan waiver from 2019-20, they remain only on paper. The finance department imposes restrictions on release of funds to adjust funds for other welfare schemes and development programmes.

In 2014, the funds were released directly to banks in instalments. But in 2018, the funds were released directly to farmers in their bank accounts in phases. In the first phase, loans up to Rs 25,000 were cleared and in the second phase, up to Rs 50,000 were cleared. Even in this, farmers were covered partially. Not a single farmer falling under Rs 75,000 and Rs 1 lakh category received the benefit so far.