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More than Rs 9,000 crore of crop loan disbursements from banks in the residual state of Andhra Pradesh would be turning NPAs by the end of this month as neither farmers nor the government, whose political leadership had promised blanket waiver, is expected to repay the money anytime soon.
Unable to decide even the extent of liability it could actually take on behalf of the farmers, the government stepped up lobbying for the reschedulement of loans under the former’s accounts to avoid a crisis in the ongoing kharif season.
State finance minister Yanamala Ramakrishnudu on Tuesday said they would put pressure on the Reserve Bank of India (RBI) from the Centre if it did not agree for the reschedulement. “It is the responsibility of the banks to reschedule the loans when the farmers are under distress,” he said while citing the declaration of almost all areas in the 13 districts as drought-or-flood-hit last year.
The authorities of the undivided government had written a letter to the RBI for a similar relief in March this year but in vain. According to government officials, the process for seeking crop loan reschedulement should have been initiated much earlier in January itself. “Over Rs 9,000 crore loans will cross the 90-day repayment deadline by the end of this month. It will keep on mounting thereafter,” a senior official told Business Standard.
Meanwhile, a team of state government officials would meet top officials of the RBI in Mumbai to make a case for rescheduling of these loans in AP besides seeking permission to raise bonds to partly meet the farm loan liability.
Chief minister N Chandrababu Naidu is also going to Delhi on Thursday for seeking a helping hand from the Prime Minister and the Finance Minister in overcoming the farm loan issue among other things.
According to the government sources, the officials engaged in the farm loan exercise told the chief minister they should first decide on the liability it was ready to take so that the whole scheme could be worked out accordingly. But no clarity had been given to them so far.
Though Naidu promised a blanket waiver of loans, including the gold loans taken for agriculture purpose, the committee constituted by the government had come up with several alternatives to reduce the financial committment.
As on March 31, this year, the total rural loan outstandings, including gold loans, stood at Rs 87,000 crore in residual AP.
Of this, crop loans were Rs 34,000 crore, gold loans Rs 20,000 crore and SHG loans at Rs 14,204 crore, according to the State Level Bankers Committee (SLBC). In addition to crop loans, the ruling TDP had also promised to waive loans taken by the women self-help groups.
