Delhi’s Farm loans take a Wrong Route

The scam is said to be in many thousand crores. The real benefit never reaches to the needy.

Delhi’s Farm loans take a

Wrong Route

Delhi is the new hotbed of Indian agriculture. Surprised? You should not. According to the data released by NABARD, Delhi, one of the biggest urban centers of the country received more than 20 thousand crores as agriculture loans in 2009-10.

‘Farmers’ in the national capital received more loans than their UP, West Bengal, Bihar and Jharkhand counterparts. The four agrarian states received less than 31,000 crores in 2009-10.

Delhi alone has consumed more than Rs57, 000 crores of farm loans since 2007-08. Farm loans are available as low as 4% and if repayment is done on time, one can get rebate on the loan as well.

Now the finance ministry is reviewing all disbursements of farm loans in the past few years, with the government investigating whether farm loans are being diverted to commercial real estate.

The figures are disturbing, given that the UPA government has over the years enhanced allocation for subsidized loans from Rs86,000 crores in 2004 to Rs4.75 lakh crore in 2011-12. The trend captured by the ministry also shows a lion’s share of the benefits being cornered by UPA-ruled states or allies, wielding their influence on vital government resources.

Delhi’s rate of disbursal is inexplicable considering the fact that the city has a mere 39,000  hectares of cropped land while Punjab has 78.61 lakh hectares. Of the 39,000 hectares of cropped land, Delhi’s record show, only 26,785 hectares is the net sown area. State government officials said that capital’s produce is so negligible that it is not even accounted for when nationwide statistics are collated.

Nevertheless, hundreds of Delhi’s residents have taken loans at cheap rates citing ‘agriculture’ as their profession. Officials who do not wish to be named said that these borrowers are not farmers- they are city’s elite who own massive farmhouses. According to MCD, there are almost 1450 farm houses in Delhi alone. In these farmhouses, the only agricultural activity that they indulge in is the planting of vegetables and flowers.

Few of the leading banks which avail farm loans in Delhi are SBI, Punjab National Bank, Bank of Baroda, Central bank.etc.

One official on the condition of anonymity said, “ The so-called agricultural land is mainly in the farmhouses located at the outskirts of the city. These are owned by wealthy businessmen and politicians. The loan disbursal amount in Delhi is high because these farmhouse owners acquire loans citing agriculture as their profession but the money is used somewhere else.”

Farm loan upto Rs 1.5 lacs can be availed without any guarantee. And the process is easy if one have some ‘gel well’ with the officials.

However, farming does take place in Delhi but farmers of nearby villages prefer to grow vegetables and flowers. The amounts cornered as farm loans indicate to sectors like real estate which is one of the most booming sectors in the capital. The gravity of the issue can be measured only when government comes out with its investigation report on the usage of this money.

The amount disbursed as farm loans seem quite high for 26,000 hectare land. This means close to one crore rupees are being issued to each hectare. India does not grow such ‘expensive’ crops.

The trend brings to the fore the issue of rampant misuse of agriculture loans. Loans classified as ‘intended for agricultural purpose’ qualify for below-inflation rates and are often written off by the government. This might be one of the reasons such loans are growing at a break-neck speed.

Agriculture in a city like Delhi is never a profitable venture, land has become expensive in the city and farmers sell their land to the developers to get hefty amounts in return.

Agricultural loans are available for various purposes. Farmers may apply for loans to buy raw material for the cultivation of food grain crops as well as for horticulture, aquaculture, animal husbandry, floriculture and sericulture businesses.

Under Kisan Credit card scheme, famers in Delhi can avail a loan of Rs15,000 per hectare without any surety. The bank will verify his personal and other records before sanctioning the loan. Once issued, a Kisan Credit Card is valid for three years, depending on the performance of the farmer, the facility can be extended.