)
Chief-minister designate of residual Andhra N Chandrababu Naidu promised waiver of all farm loans if TDP was voted to power while chief minister-designate of Telangana state, and president of TRS promised farm loan waiver applicable to loans of under Rs 1 lakh.
Bank officials at the last State-level Bankers Committee (SLBC) meeting of the undivided Andhra Pradesh held here today said the total outstandings to the agriculture sector stood at Rs 137,176.59 crore in the state of which residual Andhra Pradesh accounts for Rs 87,612.25 crore and Telangana the remaining Rs 49,564.34 crore. These include crop loans, term loans and loans taken for allied activities.
While it was not clear as to how much of this would be declared eligible for the farm loan waiver scheme in both the states, SLBC president and chairman and managing director of Andhra Bank C VR Rajendhran, however, said the burden on the state exchequer would be much larger compared with the last loan waiver scheme announced in 2008 by the UPA government.
Close to Rs 16,000 crore loans, including gold loans, taken for agriculture purpose was waived in Andhra Pradesh at that time. The flow of agriculture credit almost quadrupled since the last waiver in AP as well as in the country though the ruling Bharatiya Janata Party(BJP) so far has made no promise of supporting such loan waiver schemes.
Outgoing chief secretary, PK Mohanty, while addressing the meeting indicated that in the run up to the loan waiver scheme all the loans advanced to the agriculture sector during 2013-14 could be rescheduled on account of crop damage.
During 2013-14 banks lent Rs 73,494 crore loans as compared to the actual target of Rs 67,224 crore to the farm sector. Of this, Rs 51,955 crore was given as crop loans, Rs 21,539 crore as term loans and also to allied activities, according to the SLBC.
According to him, the state government had approached the RBI requesting for reschedulement of agriculture loans in 800 mandals where crops had been damaged because of untimely rains and floods and in another 190 mandals due to drought conditions. The balance out of the over 1,100 mandals in the state are urban mandals.
SLBC president Rajendran suggested to the state authorities to frame proper guidelines for loan waiver to eliminate the misuse and also to keep the financial liability low. He said any delay in regard to rescheduling of loans will put the banks under tremendous pressure as the requirement for fresh agriculture loans was already around the corner.
Special chief secretary and chief secretary designate of residual Andhra Pradesh government I Y R Krishna Rao requested the bankers to work on the loan waiver as the government of residual AP would be going ahead with the implementation of its election promise.
Interestingly Andhra Pradesh government had spent over Rs 550 crore towards interest subvention scheme for the timely repayment of farm loans in the last two years, according to a banker.
