Agriculture loans to corporates

Kashmir Times. Dated: 9/8/2018 2:28:58 PM

Advancing loans to corporate houses at 4 percent interest rate under agriculture category amounts to deceiving farmers of India

The Reserve Bank of India (RBI) revelations in reply to a Right To Information (RTI) query that agriculture loans worth Rs 59,000 crores disbursed to only 615 corporate entities is shocking and surprising. The reply from the RBI also shows that these loans advanced in the name of the farmers are attracting only 4 percent interest rate, which shows that the BJP-government and the previous UPA-II regime favoured a selected number of corporate houses for this purpose. It is unfortunate that these loans have been shown to have been advanced to the farmers when the latter have been crying for loan waivers and special assistance from the banks for overcoming their difficulties caused by failure of crops. It is also surprising that as per the mandate of the RBI and the government, at least 18 percent loans should be advanced to the Priority Sector that includes farmers, small and medium industrial enterprises besides education and employment opportunities. But it is a sad state of affairs that the farmers category also includes a large number of corporate houses which have availed loans for setting up wholesale and retail businesses for purchase and sale of agriculture products from the farmers. The RTI reply from RBI also reveals that on an average Rs 95 crores have been advanced per corporate entity. This trend has been continuing since 2007 and the more or less the figure has been Rs 75 crores per head to the corporate houses under agriculture loans head on annual basis. Moreover, the number of account holders has almost remained the same on annual basis. Apart from this, the setting up of chain of cold storages across the country for storage of agriculture products has also been under the same head of loans account. In certain cases, it has been pointed out that the corporate houses having got allotment of huge chunks of land for commercial purposes has also been shown as agriculture sector. The loans so availed have also been shown to have been procured against these large chunks of land across the country. The agriculture loans in these cases have not attracted the strict compliance of guarantees and additional mortgage of the property from the commercial areas. In certain cases, the large chunks of land allotted for industrial activities have also been shown as agriculture land use by these corporate houses.
The RBI figures also reveal that agriculture loans have also been used by the corporate houses for construction of godowns for storage of agriculture products as part of the chain for retail sale. Though the UPA-I and UPA-II continued to advance agriculture loans to the extent Rs 8.5 lakh crores, the BJP-government acted more brazenly and these loans rose to more than Rs 11 lakh crores in the first two years of their rule. In fact, the per capita advances touched a new high Rs 95 crore per account of the corporate houses. There is no mention of the repayment of the loans by these corporate houses. It is suspected that some of the loans have been shown as bad debts and Non-Performing Assets (NPA) by the banks. In one cases, the richest bank branch of State Bank of India in Mumbai has shown having advanced loans to the extent of Rs 30 crores to only three account holders. Same is the cases in respect of another bank branch in Mumbai by another bank to the extent of Rs 27 crores. The farmers, who want to avail of loans running into lakhs of Rupees face harassment and ultimately have to look towards the money lenders for cropping during the seasons. The bank experts are of the opinion that most of these loans are pouring into agriculture and industrial sector of farm products. The farmers have been at loss how such loans are processed and sanctioned freely by the central government in favour of the corporate houses when the marginal farmers are facing debts due to crops failure and less return on their agriculture produce due to wrong policies of the government. The farmers rallies across the country during the past few days are an indicator that everything is not well in the agriculture sector and more protests will staged in the days to come. Apart from the opposition political parties staging protest demonstrations against the policies of the government, the RSS affiliated Bhartiya Mazdoor Sangh also organized a rally on Friday against the government policies. Unless some solution is sorted out for helping the farmers in the country, the government will be in a thick in the days to come particularly in the elections year in 2019.



Indian History... Read More



Daily horoscope