Commercial banks have aggressively extended loans to farmers. But the money is being used for purposes not even remotely related to agriculture. By ASIF AHMED
“A man, who has never sown seeds in the scorching heat in the month
of June, will never know what real summer is. And a man, who has never watered his fields in the chilly winters of December, may never know what winters mean,” said the late Rajesh Pilot, a former cabinet minister, while addressing a rally of thousands of farmers years ago. The 60-year old Bhopal Singh, a resident of the fertile area of Khanpur village in the holy land of Haridwar district, remembers that speech quite clearly.
Pilot was right. For the Indian farmer, life had never been as tough as it is today. Ironical, I thought, as I gazed at the paddy fields in Khanpur, which were simply amazing. They were like green carpets or huge golf courses spread over bighas and bighas of land. But what was difficult to understand was the reason why the average Indian farmer is buried under huge debt even after 60 years of Independence, why can’t he send his son/daughter to a primary school, and why his annual crops fail to bring a smile to his face.
Even today, despite the rise of manufacturing and services sectors, agriculture has a dominant role to play in the Indian economy. Despite a decline in its share in GDP, it provides livelihood to nearly two-thirds of our population. Besides, agriculture provides raw material for industrial growth. Enough has been said on the issue, but not enough has been done to give a push to agriculture which, if accelerated, can actually propel the annual GDP growth to double digits. The 11th Plan document calls for agriculture growth of 4%, but the sector has hardly seen any capital investments and, over the past five years, the sector has witnessed a CAGR of a mere 2.3%.
One thing that Indian farmers need desperately is ‘credit’, and to the credit of the UPA government, it has considered it to be a top policy priority. According to the RBI’s latest annual report, the credit flow to the agricultural sector exceeded the target for the third consecutive year in 2006-07. Credit flow from commercial banks to the agriculture sector during the current financial year is likely to touch Rs.2,40,000 crore, as against the target of Rs.2,25,000 crore, union finance minister P. Chidambaram recently said that the figures were impressive even at the micro level. We decided to check out if this was indeed true.
“As the lead bank in Haridwar district, it is the responsibility of our bank to act as a coordinator between the bankers and government machinery. It is our responsibility to implement all the government-sponsored schemes, which are operating in the district as well as pinpoint and rectify any problems in the credit-delivery mechanism. Not only have we achieved the government objectives, in most of the cases, we have even surpassed the targets by significant margins,” says a bank officer, who’s in charge of the lead bank’s (Punjab National Bank) branch office in Haridwar district. In an attempt to give a push to credit delivery in India, the Punjab National Bank recently organised a loan mela (it was actually called a camp as the Reserve Bank of India has asked banks to refrain from using the word ‘mela’ as it diluted the event’s image) in Haridwar to clear all funds for the government-sponsored schemes that were pending in various branches. The idea was to help the banks in the region to achieve targets in different schemes before the closure of FY08. “The effort was worth it as a total of 450 borrowers were sanctioned loans worth Rs.3.5 crore,” the manager adds.
“The situation has improved, since manager sahib came to our branch,” feels Karam Singh, a farmer in his late forties. Short-term credit, which has a repayment period of one year, is disbursed through KCC (Kisaan Credit Cards), which has become the lifeline of small farmers. “Through KCC, we are now able to repay our debt, meet our day-to-day expenses, build pucca houses, and use the credit for marriage purposes,” was a constant refrain one heard from almost all the farmers we met in the area.
“A man, who has never sown seeds in the scorching heat in the month
of June, will never know what real summer is. And a man, who has never watered his fields in the chilly winters of December, may never know what winters mean,” said the late Rajesh Pilot, a former cabinet minister, while addressing a rally of thousands of farmers years ago. The 60-year old Bhopal Singh, a resident of the fertile area of Khanpur village in the holy land of Haridwar district, remembers that speech quite clearly.Pilot was right. For the Indian farmer, life had never been as tough as it is today. Ironical, I thought, as I gazed at the paddy fields in Khanpur, which were simply amazing. They were like green carpets or huge golf courses spread over bighas and bighas of land. But what was difficult to understand was the reason why the average Indian farmer is buried under huge debt even after 60 years of Independence, why can’t he send his son/daughter to a primary school, and why his annual crops fail to bring a smile to his face.
Even today, despite the rise of manufacturing and services sectors, agriculture has a dominant role to play in the Indian economy. Despite a decline in its share in GDP, it provides livelihood to nearly two-thirds of our population. Besides, agriculture provides raw material for industrial growth. Enough has been said on the issue, but not enough has been done to give a push to agriculture which, if accelerated, can actually propel the annual GDP growth to double digits. The 11th Plan document calls for agriculture growth of 4%, but the sector has hardly seen any capital investments and, over the past five years, the sector has witnessed a CAGR of a mere 2.3%.
One thing that Indian farmers need desperately is ‘credit’, and to the credit of the UPA government, it has considered it to be a top policy priority. According to the RBI’s latest annual report, the credit flow to the agricultural sector exceeded the target for the third consecutive year in 2006-07. Credit flow from commercial banks to the agriculture sector during the current financial year is likely to touch Rs.2,40,000 crore, as against the target of Rs.2,25,000 crore, union finance minister P. Chidambaram recently said that the figures were impressive even at the micro level. We decided to check out if this was indeed true.
“As the lead bank in Haridwar district, it is the responsibility of our bank to act as a coordinator between the bankers and government machinery. It is our responsibility to implement all the government-sponsored schemes, which are operating in the district as well as pinpoint and rectify any problems in the credit-delivery mechanism. Not only have we achieved the government objectives, in most of the cases, we have even surpassed the targets by significant margins,” says a bank officer, who’s in charge of the lead bank’s (Punjab National Bank) branch office in Haridwar district. In an attempt to give a push to credit delivery in India, the Punjab National Bank recently organised a loan mela (it was actually called a camp as the Reserve Bank of India has asked banks to refrain from using the word ‘mela’ as it diluted the event’s image) in Haridwar to clear all funds for the government-sponsored schemes that were pending in various branches. The idea was to help the banks in the region to achieve targets in different schemes before the closure of FY08. “The effort was worth it as a total of 450 borrowers were sanctioned loans worth Rs.3.5 crore,” the manager adds.
“The situation has improved, since manager sahib came to our branch,” feels Karam Singh, a farmer in his late forties. Short-term credit, which has a repayment period of one year, is disbursed through KCC (Kisaan Credit Cards), which has become the lifeline of small farmers. “Through KCC, we are now able to repay our debt, meet our day-to-day expenses, build pucca houses, and use the credit for marriage purposes,” was a constant refrain one heard from almost all the farmers we met in the area.
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best – during the Clinton Administration was going hell for leather and chastising the Chinese regime for human rights violations. Mired in the Monica Lewinsky scandal, even Clinton started making noises about the same. China dropped the bomb shell and literally brought Washington down on its knees. It blithely announced that aircraft orders will not go to Boeing but to its rival Airbus from Europe. As the Indian aviation market grows explosively, even Indian policy makers have a huge opportunity to do something similar – leverage aircraft purchase orders and bilateral agreements with other airlines, to extract concessions in other spheres – economic, political & even strategic. According to Director General of Civil Aviation (DGCA), annual air passenger traffic in the country grew by 46% & 49% in the last two years, respectively. And if the estimates of International Air Transport Association (IATA) are to be believed, this growth has played an important role in boosting the world’s aviation business, which is expected to grow to $5.6 billion this year from $5.1 billion a year ago.
the entities which benefit the most, perhaps, out of this phenomenon are modern day centres of affluence & influence – MNCs. As they profit and in the process, enhance employment and production, goes unnoticed is that their drive to profit, which leaves the rest in pain, is their lack of concern and efforts towards safe working of their industrial units, across the globe. While a McKinsey report has exemplified that cumulative market value of top 10 Fortune 500 companies is equal to combined GDP of India & Brazil or total forex reserve of six leading Gulf oil exporting countries in 2006, but their irresponsible, greedy & biased business policies and activities without considering people, environment & legal aspects, have brought apocalypse in form of fatal industrial accidents, environmental hazards, affecting millions in myriad other ways.
the Indian Left is hell-bent on seeing the Indo-US nuclear deal die its natural death – the rightist forces led by some religious groups in the US are launching a campaign against the deal on the grounds that it goes against the US non-proliferation goals & strengthens India’s strategic options. In addition, the recent resignation of US’ Under Secretary for Political Affairs Nicholas Burns, the Chief Architect of the 123 agreement sent shivers down the Indian strategic community. However, the fears were short-lived – Nicholas will continue as the Special Envoy on the nuclear deal till at least the end of the Bush Administration.
d several options to locate its ‘cheap car’ factory (or assembly units), the Tatas seem to have got their back-end in place. Simultaneously, they had to look at the front-end; after all, Tata Motors wanted to sell the Rs.1 lakh car in as many markets as possible. It was meant to be a global car for global consumers. It is in this context that the Jaguar-Land Rover deal will immediately help it to tap the European market.
one is reminded of a famous one liner by popular Hollywood actor, Will Smith, in the movie Hitch, when he says, “Basic principles? There aren’t any.” Months after all the subprime mayhem has been unleashed, the casualties are still being counted. And one would feel that the markets would be keen on behaving rationally for a while. But then, if that’s what you think, what would you make of Citadel Investment Corporation’s whopping cash infusion of $2.55 billion in a subprime tainted E*Trade Financial Corporation? And other similar big ticket infusions in Citigroup, Merrill Lynch & northern rock, among others?