CHENNAI: Chief Minister J Jayalalithaa on Sunday urged Prime Minister Narendra Modi to continue with the existing disbursement model for the interest subvention programme for short term credit to farmers, and called for deliberations with stakeholders on the proposed changes to arrive at a more effective and supportive farm credit scheme.
“In this regard, I will also like to suggest that the proposed modifications may be discussed either in the National Development Council or in the Governing Council of the NITI Aayog and can be implemented thereafter with appropriate modifications on which there is a consensus”, Jayalalithaa said in a letter to the Prime Minister.
Considering the uncertainty endemic to agriculture, any significant increase in the present lending rates, by linking them to the base rate, or any reduction in the concessions of farm loans would be uncalled for and a retrograde measure. Further, the change in procedure, which expected the farmer to pay higher interest rates and then receive reimbursement of the interest subvention component through DBT would only needlessly add to the complexity of the scheme and compound the misery of farmers, Jayalalithaa said and pointed out that in the earlier system when loans were disbursed through their bank accounts, farmers enjoyed concessional credit right at the initial stage when drawing loans.
“Under these circumstances, switching over to the new model of DBT at the post repayment stage directly to the farmers’ accounts will not bring any significant benefit in terms of greater accuracy of targeting, accountability or timely availability of credit to farmers. Hence, the proposed move requires detailed deliberation with stakeholders”, the Chief Minister said.
In a circular dated April 10, 2015, the Central government had indicated that pending the introduction of certain changes, the existing model of interest subvention scheme would continue as an interim measure till June 30 this year, which has now been extended up to July 31 2015, she said.
“The time frame indicated is fast approaching and the uncertainty regarding the continuance of the existing scheme and lack of clarity about the new procedure to be introduced will adversely impact the agriculture sector, especially when the country is facing a delay in the onset of monsoon and an imminent risk of drought”, Jayalalithaa said.
Tamil Nadu is providing an additional 4 per cent interest subsidy on crop loans disbursed through co-operatives using State budgetary support, over and above the interest subvention provided by the Union government, she pointed out. This made short term crop loans in the State interest free to farmers who repay the loan promptly. As it is time for the country to give a big push to the agriculture sector by ensuring adequate flow of credit, any major changes in the present scheme without adequate consideration of the grass root level realities might prove to be disastrous, the Jayalalithaa said.
“The summer crop in Tamil Nadu is very limited and the bulk of crop loans is availed only during the south-west monsoon period commencing from June and in the north-east monsoon period. Any further delay in taking a decision on the continuance of interest subvention for crop loans will affect agricultural prospects in the State, she added.
