The survey reported that 52 per cent of households in the country were indebted, with levels of indebtedness varying from 93 per cent in Andhra Pradesh and 82.5 per cent in Tamil Nadu to 37 per cent in Chhattisgarh and 17.5 per cent in Assam. The average amount of outstanding loan was highest for Kerala (Rs.2,13,600) followed by Andhra Pradesh (Rs.1,23,400) and Punjab (Rs.1,19,500).
Now let us look at the other side of the coin. While reading out the Rs 52,000-crore debt waiver scheme in his Union Budget 2008 speech, the then Finance Minister P Chidambaram showed special concern for the indebted farmers, especially the small and marginal farmers. But the scheme had some serious flaws, because the outreach of any government measure is limited, and some section of the society would be benefited more than the other. A CAG report found that 8.5 per cent of the beneficiaries to be ineligible for loan waiver. Overall, in 22.32 per cent of the 90,576 cases checked had lapses or errors.
A CAG report found that 8.5 per cent of the beneficiaries to be ineligible for loan waiver. Overall, in 22.32 per cent of the 90,576 cases checked had lapses or errors.
Continued dependence of small and marginal farmers on informal sources is due to constraint in the rural banking network and services arising out of financial sector reforms. Informal sources do not insist on formalities like bank accounts or punctual repayment as banks or cooperative societies do.
- MSP not reaching all- The NSSO survey revealed among households reporting sale of paddy crop only 32 per cent were aware of MSP operations and only 13.5 per cent actually sold to procurement agencies during July to December 2012.
- Crop not insured- Over 95 per cent paddy and wheat growers and nearly 99 per cent of sugarcane farmers did not insure their crops during two consecutive agricultural seasons- Kharif 2012 and Rabi 2013.
- Lags on government services- Over 59 per cent of the farm households received no assistance from either government or private extension services. Of the 40.6 per cent households which received extension assistance, only 11 per cent of the services came from physical government machinery- extension agents, Krishi Vigyan Kendras and agricultural universities.
Prerna Singh is a student of Agribusiness at Gokhale Institute of Politics and Economics, Delhi
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