The Tamil Nadu government has made a provision of Rs 1,062.48 crore towards waiver of agriculture loans for the year 2009-10. It has also set a target to sanction fresh crop loans to the tune of Rs 2,000 crore during the current financial year, mainly through cooperative banks in the state.
According to state government’s official figures, Tamil Nadu had released Rs 1,674.04 crore to cooperative banks, the National Bank for Agriculture and Rural Development (Nabard) and the central government as compensation for waiver of loans in 2006-07 . Similarly, Rs 1,630.22 crore and Rs 1,198 crore was released in 2007-08 and 2008-09 respectively.
Through the Union government’s waiver scheme, the cooperative sector had received Rs 88.52 crore, as against the eligible amount of Rs 158.07 crore benefiting 1,12,621 farmers in the state.
The government had also set a target of lending Rs 2,000 crore as crop loans for 2009-10 as compared to Rs 1,570.99 crore disbursed to farmers in 2008-09, up 27 per cent, according to the government’s policy note.
These crop loans, which witnessed 50 per cent jump over the last five years, were extended to the farmers through 4,522 primary agricultural cooperative credit societies in the state.
To boost the crop loans further through the cooperative banks, the government had announced that “from the current fiscal, interest will not be charged on cooperative crop loans to all farmers who repay them on time”. It has also allocated Rs 140 crore to compensate the interest loss of the cooperative institutions, which were borrowing the money from Nabard at the rate of four per cent.
The cooperative credit societies also lend other loans to buy farm machineries, micro irrigation, dairy and other allied activities and even for non-agricultural purposes like purchase of consumer durables, housing loans, education and professional loans.
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Disbursement of such loans, called as other loans, through credit societies increased to Rs 5,485.50 crore in 2008-09 from Rs 3,641.45 crore, up 50 per cent.
To equip these societies to compete with other lenders and to offer better services for customers, the government is planning to introduce banking technology in all the credit societies during the current fiscal.