BENGALURU: The Rs 34,000-crore loan waiver expected to help 17.32 lakh farmers may be something that Chief Minister H D Kumaraswamy takes pride in, but the waiver gives no immediate respite to farmers.
Those eligible for the waiver will now have to wait for three months before they receive a ‘debt-free’ certificate which qualifies them to avail fresh credit.
This essentially means that farmers who have not renewed their loans with banks in the hope of a loan waiver will not receive any fresh loans for this season’s Kharif crop.
“Loan renewal has to happen in the month of April-May but a majority of the farmers did not renew loans in anticipation of the waiver since BJP and JD(S) had promised it in their manifestos. Even banks didn’t promote loan renewal. Now, no new loans for Kharif crops are being given and this will continue until loans are waived on the ground,” said Maruti Manpade, president, Karnataka Prantha Raitha Sangha.
But for the loans to be waived, farmers will have to wait for at least three months. The process of the waiver will begin only after a month, sources in the government told TNIE.
“We have to hold meetings with banks and enter into agreements with each bank,” said an official from the Chief Minister’s office.
What next?
The government will ask banks to prepare a database with information on the number of accounts eligible for the waiver and their crop liabilities. These numbers, once submitted by individual banks to the government, will be electronically fed into systems for the verification process. A special unit being set up in the finance department will look into the verification process.
“We will use Aadhaar seeding and our own database from ‘Bhoomi’ to compare the details of farmer name, land size, land survey number etc provided by the bank. Accounts with discrepancies will be rejected and others will be cleared,” said an official supervising the process of loan waiver.
Final numbers, bank-wise, will be compiled through this process after which the government will divide the total reimbursement into four equal instalments.
“The first instalment will be paid by cash. For the rest, banks will have to either accept our covering guarantee and adjust the loans or give us zero coupon bonds/low-interest bonds of less than 1-2 per cent interest.
The bonds may have a tenure of 10, 24 and 36 months,” the source added.
After the completion of this process, banks will hand out ‘debt-free’ certificates to farmers authorising them to apply for fresh credit. The first of such meetings between banks and government will be held shortly under the chairmanship of Chief Minister’s economic advisor.
With months to go before they lay their hands on the ‘debt-free’ certificate, farmers are compelled to approach private money lenders.