Editor’s Note: What’s Ailing Rural India is an award-winning series by CNBC-TV18. This month, the series shines the spotlight on the farm distress in the Marathwada and Vidarbha regions in Maharashtra against the backdrop of the state government’s recent schemes to tackle farmers' woes.
“No,” was an emphatic answer from a group of farmers in Aurangabad’s Vaijapur taluka when asked if they were beneficiaries of the govt’s loan waiver scheme.
“I had a loan of Rs 35,000 from the society, but even that has not been waived off,” said Salunkhe Sahibrao Patil, a farmer in Vaijapur.
“In our village most farmers have loans of less than a lakh but none of us have been qualified. There have been so many lists that we are confused,” another farmer added.
Cut to Khupgaon in Buldhana district where most farmers have been named in the loan waiver lists.
“I have got my Rs 70,000 loan waived off but I am not getting new loans from bank. Have made multiple rounds to the bank in last 4 months and now have taken a private loan of Rs 70,000 for sowing my kharif crop,” said Ashok, a farmer in Khupgaon village in Buldhana district.
When asked how this is possible if the government claims that all waiver beneficiaries are given loans on priority he shouted. “Even after running around for 4 months I didn’t get bank loans, what am I supposed to do.. commit suicide for the govt to listen to me.”
Another farmer sitting next to him added his own story. “My name appeared in the third list for loan waivers, but settlement is not reflecting in my accounts for 4 months. There are many like this in our village.”
Last year in June the Maharastra government under pressure from various farmer agitations announced a crop loan waiver scheme that is to waive off up to Rs 1.5 lakh of crop loans taken up till June 2016. The government has estimated to spend Rs 34,000 crore for the same and benefit 89 lakh farmers through the scheme.
From those who didn't make it on the loan waiver beneficiary lists to those farmers who despite a waiver are still dependent on private loans, the story of waivers and crop loans was similar across districts that we travelled to. Even in Aurangabad’s Chitepimplegaon where farmers were making desperate trips to the banks in need of money.
For Mahajan Shivsingh Bahure the trouble was different. “I was in the one-time settlement list for loan waivers and had to pay Rs 13,500 to get my loans waived off. Since 5 months I have been requesting bankers to deduct that amount from my account and clear my files. My new loan are stuck because of that, what do I do,” he said. Bahure was waiting for his turn to meet the manager at Maharashtra Grameen Bank’s Chitepimplegaon branch.
Farmers standing next to him agreed in unison that they had to make multiple rounds to the banks to request new loans, but it was still not coming by.
The loan waiver scheme entailed three routes to get waivers: full loan waivers to those accounts that had up to Rs 1.5 lakh, one-time settlement for amounts over 1.5 lakhs where farmers had to deposited excess amount to get the waiver. For regular payees, there is an incentive of up to Rs 25,000.
Chitepimplegaon branch has total 1200 crop loan accounts, of which 661 accounts have been selected for loan waivers.
Bank Manager told CNBC TV18 that till mid-July they had disbursed Rs 2.47 crores as fresh crop loans to 255 bank accounts, of which 214 were of loan waiver beneficiaries.
“We are prioritising loan waiver beneficiaries for fresh loans.”
But many farmers complained of long processes. “It has been 4 months since my Rs 1.30 lakh loan was waived off, but I am not getting fresh loans as bankers say some inquiry is going on.”
U. R Kulkarni, Maharashtra Gramin Bank’s Regional Manager in Aurangabad said, “We are expediting loans to all loan waiver beneficiaries on an urgent basis but also giving to new ones. We have decide that not a single family should be left without a crop loan.”
Even as government pushes its loan waiver scheme that has till now only covered 37 lakh farmers out of the 89 lakh expected beneficiaries, Anticipation of more waivers may have inadvertently led to a rise in wilful defaulters.
Anjangaon Bari, a big village in Amravati district, 20 kilometres from the city told the story unapologetically.
Many farmers in the village, who have till now being regular with their loan repayments, chose to default on their loans last year and some defaulted this year. It was driven out of a hope of further loan waivers and for some it was out of frustration.
“What is the point of borrowing from people to repay bank loans when those who default get a waiver eventually,” said Mangesh Hatvar, a farmer that had total crop loans of 3.5 lakhs on 2 accounts and has been regular till last year on his repayments. This year he defaulted on both loans accounts, wilfully.
“What is the motivation or benefit to regular farmers, those who default for 5 years get better treatment” said Subhash Ghatwar, another farmer in the village.
Critics of loan waivers have long warned of falling credit discipline, in turn creating more defaulters and reducing credit disbursal.
SantoshKumar Korpe, Chairman, Akola District Co-Operative Bank said, “Our recoveries used to be nearly 85-87% till 2 years ago and this year our recoveries have fallen to just 24%.”
In Maharashtra, even as the target disbursement amounts kept rising from Rs 37677 crore to Rs 43873 crore from 2016 to 2018, the actual crop loan disbursement figures fell from Rs 27022 crore to Rs 17961 crore in the three years. The sharpest plunge was in 2017, the year when the loan waiver scheme was announced.
This, experts say is a clear indication that more farmers have been pushed in the hands of private moneylenders.
Shreenivas V Khandewale, Director, R.S. Ruikar Institute of Labour & Socio-Cultural Studies, Nagpur said, “Last week there were reports that private moneylending is on a rise.. so any scheme that pushes people to private loans needs urgent renovation. we need to help farmers in a productive manner.”
Constant changes to the rules of the loan waiver schemes, 67 in a year, changing beneficiary criteria every few weeks too has added much confusion. And while the government has now expanded the waiver list to include all loan accounts in a family.. how much and by when will this help to regularise credit cycles in rural Maharashtra still remains a big question.
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