Task force urged RBI Governor to save 8 million credit starved farmers

Task force urged RBI Governor to save 8 million credit starved farmers

Dated 14 June 2016  

Maharashtra Govt. mega plan to bring 80 % debt trapped dying drought hit

8 millions distressed farmers to stop ongoing farmers suicides in 14 districts of Marathwada and Vidarbha is running in to hot water due apathy of apex bank and complete hostile functioning of PSU banks controlled by RBI as state Govt. proposal of giving fresh crop loan to earlier defaulters since 2012 is not getting final nod from RBI governor Raghu Ram Rajan who is known for his negative stand for farm loan waiver or giving fresh direct credit allocations in the agriculture sector hence special task force headed farm activist has now approached RBI governor Raghu Ram Rajan for in his urgent intervention and special bailout package so that every debt trapped is brought under intuitional credit cover , Farmers Distress Removal High Power Task Force ( Vasantrao Naik  Sheti Swavalamban Mission (VNSSM) chairman Kishore Tiwari urged in letter written to RBI Guv. Raghu Ram Rajan.

VNSSM has informed RBI governor Raghu Ram Rajan that Maharashtra is facing severe drought in 14 districts of Marathwada and Vidarbha region since 2014 and crop failure is being reported since 2012 and prevailing acute distress and despair has resulted in to very serious issues of farmers suicides and to address this agrarian crisis state govt. has started numbers of direct and indirect intervention in area of food security and health security ,rural employments ,creating protective irrigation facilities in each drought prone villages of region and promoting sustainable agriculture but more than 13.6 million  registered farmers (khaatedar shetkari) in the state they are defaulter and out of network of institutional credit network hence as   India Meteorological Department (IMD) has predicted a favorable monsoon this year as matter of one  major relief  intervention to save these 13.6 million debt trapped farmers Maharashtra CM Devendra Fadanvis announced  a   to provide crop loans to at least 80% of these farmers by restructuring all crop loan pending since 2012 and as per prevailing RBI norms Normally, in case of drought, loans of immediate preceding year are revamped but State govt plan  restructure farm loans for 2012-13 and 2013-14 has been getting delayed as RBI says case does not fit rule book, as  The apex bank has said revamping of four-year-old loans is not allowed according to current rules, and the matter will have to be looked into. The state government, however, wants to finish maximum disbursals by June-end, for which it is hoping the RBI gives its approval at the earliest, Tiwari urged.

As debt is main issue in all cases of the farmers suicides in 14 districts of Maharashtra’s drought affected region hence the state has decided to cover all 8 million farmers of this to cover under institutional credit and has made very strong case before RBI asking   all older loans to be reset. It says there were crop failures in some patches. Recession in the cotton rates had also hit farmers' repayment facility. The state is insisting that these were not wilful defaults by farmers and their case needs to be considered. However, RBI says that the rule book does not allow it ,here we need special attention of RBI Grv.

VNSSM wants to revamp the loans so that more farmers are eligible to get fresh credit, and it can meet the target of bringing 80% of agriculturists under the bank loan net. Senior bureaucrats of secretary and chief secretary level have taken up the matter with RBI but till there is no response resulting in daily credit starved farmer’s suicides in Maharashtra, Tiwari added.

Task force  asked Raghu Ram Rajan “Its not a time that the RBI sitting as mute spectator, when our farmers are constrained to commit unfortunate suicides…………..!!!!”..We know that you are very busy & occupied,  but have a couple of minutes to read & act on this in the interest to protect dyeing farmers….!!.

The RBI has not turned down the proposal immediately, but it had asked the state to come up with data like the number of loans and their type. The data has been provided, but the RBI has not reverted after that.

Kishore Tiwari, said the move will cover some 8 million farmers having loans worth Rs.36,000 crore. The RBI should take a sympathetic approach towards farmers, especially when the state government is ready to foot the interest on these loans, he said. Tiwari also asked the RBI to give its approval before June 31, otherwise farmers may resort to private moneylenders. "After the different loan waivers, this is the year when the highest defaults were seen," he said.

The announcement was made on April 28 and the RBI came up with the query on May 9. A meeting was held a fortnight later between senior bureaucrats and RBI management, and the decision is awaited, said Tiwari.