In a key move to promote institutional credit in the agricultural sector, the centre will ease the credit norms in schemes such as the Kisan Credit Card for small and marginal farmers. The group, which constitute over 90% of agricultural population, is vulnerable to risks for their dependence on usurious informal private lenders.
According to the new guidelines, standard security requirements like hypothecation of crops are not required for loans of up to Rs1 lakh. This is also applicable to loans taken through the Kisan Credit Card, which allows land-holding farmers to meet short-term credit requirements.
The government aims to boost Institutional credit disbursed through scheduled commercial banks, cooperatives and regional rural banks to farmers as these loans are crucial for them to purchase various agri inputs like fertilisers and irrigation equipment. The 2018-19 Union budget had raised the target for farm credit by 10% to Rs11 lakh crore.
Under the Kisan Credit Card scheme, small farmers can also apply for loans ranging from Rs10,000 to Rs 50,000 for post-harvest warehousing needs and setting up of small-scale dairy and poultry farms. For this, branch managers have been empowered to disburse the amount based on their assessment and without relating it to the value of land owned by the farmer.
Small and marginal farmers as well as share-croppers, who have been considered as non-land-owning cultivators, will also be exempted from submitting “no dues” certificates by district authorities for new loans of up to Rs 50,000, say reports. These measures, among others, include steps to provide hassle-free crop loan to small and marginal farmers, says a Reserve Bank of India report.
Prime Minister Narendra Modi has set the target of doubling farmers’ income by 2022. Agriculture credit disbursement to small and marginal farmers has grown from Rs. 3.80 lakh crore in 2015-16 to Rs 5.34 lakh crore in 2016-17. The number of their loan accounts grew from 54 million to 77.1 million during this period.
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