CM gives tillers reasons to smile

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In a major policy initiative to benefit the agricultural sector, Chief Minister N. Kiran Kumar Reddy on Tuesday announced that farmers need not pay interest on loans that are repaid on time. At a meeting with the State Level Bankers Committee here, Mr Reddy said the government would directly remit the interest component on the loans availed by the farmers to the banks. He asked the bankers to give clear instructions to all their branches not to collect interest from farmers from this kharif season.

Until now under the zero per cent interest scheme, farmers had to repay the loan along with interest and the government would reimburse the interest at a later date. The farmer did not get any immediate benefit for prompt repayment while delay in reimbursing of the interest created financial hardships for him.

The SLBC fixed an outlay of state credit plan for 2012-2013 under priority sector at Rs 82,167 crore of which agriculture will get Rs 52,972 crore. With the outlay for non priority sector of Rs 28,778 crore included, the total outlay of state credit plan amounts to Rs 1,10,945 crore. The CM also asked the bankers to expedite opening of no frills accounts (opening account with nil balance) facilitating the payment of input subsidy to farmers. Of the Rs 1800 crore released towards input subsidy, Rs 700 crore remained undisbursed as farmers do not have bank accounts. The government has decided to deposit input subsidy directly into the bank accounts to avoid middlemen and misuse of funds, he added.

Agriculture minister K. Lakshminarayana expressed unhappiness over the tardy progress in sanctioning farm loans to licensed cultivators (tenant farmers). The banks sanctioned a meagre Rs 393 crore in loans to 1.98 lakh licensed cultivators as against 5.76 lakh recognised by the government. The targeted sanction of loans is Rs 2,000 crore. He also took objection to some bankers issuing instructions to their branches in violation of the decisions taken in the SLBC meeting.