The Uttar Pradesh government today announced an agricultural loan waiver worth Rs 1,650 crore, likely to benefit about half a million small and marginal farmers. It would apply to farmers who’d taken up to Rs 50,000 of loan from the UP Sahkari Gram Vikas Bank (UPSGVB) against farm land as collateral. The rider is that the borrower should have repaid at least a tenth of the principal amount by March 31, to be eligible. The waiver would include both the principal due and interest on it.
The ruling Samajwadi Party had in its manifesto for the legislative assembly poll earlier this year promised to stop the practice of auctioning a farmer’s land to recover loan dues.
However, this scheme does not cover agricultural loans by other cooperative banks and other financial institutions, state chief minister Akhilesh Yadav told the media here, putting the number of beneficiaries at 720,000.
Until March, the UPSGVB had 323 branches across the state, with total deposits and advances at Rs 7,533 crore and Rs 3,820 crore, respectively, a credit-deposit ratio a little above 50 per cent. It recovery percentage was a poor 6.3 per cent, with overdues of Rs 1,716 crore. The recovery percentage of the UP Cooperative Bank was much stronger, at 37 per cent until March 31.
“The loan waiver would also reduce the non-performing assets of UPSGVB and strengthen its financial position,” a senior Lucknow-based banker told Business Standard.
Earlier, the government had made budgetary provision of Rs 500 crore for the scheme and more allocation would be made in the coming budget, Yadav said.
