While dealing with compliance audit of the assistance to farmers through Primary Agricultural Cooperative Societies (PACS) under Cooperation Department from June to September 2019, the Comptroller and Auditor General (CAG) of India observed that new loans were sanctioned to repay old loans.
Sanctioning loans to repay old loans cannot be called prudent lending by any means and carries the inherent risk of perpetuating indebtedness for farmers and increase of Non-Performing Assets (NPA) for co-operative banks at the time they are financially strained, the CAG observed.
The details of the audited statement were revealed in a Press conference held at the AG Office on Sunday, by Accountant General Bibhudutta Basantia. The system adopted by the Societies and Cooperative Banks for facilitating repayment of crop loans by the farmers by sanctioning fresh crop loans year on year without actual disbursement, needs to be reviewed immediately, the CAG report suggested.The report further added that the department implemented a new system for facilitating drawal of funds by farmers through RuPay Kisan Cards but without ensuring the basic requirement of verification of farmer membership details.
This has put an additional burden on the exchequer to the tune of Rs 17.43 crore, which was rendered entirely wasteful, it stated. Additionally, owing to lack of monitoring, the computerisation in PACS and connectivity through VSAT was delayed for which the farmers were deprived of e-banking and access to ATMs through RuPay Kisan Cards, the report said.
Non-extension of relief to calamity affected farmers in time deprived the affected farmers of getting relief. Similarly, the facility of obtaining agricultural equipment on hire basis for farmers was denied because of laxity in framing modalities for establishment of Agro Service Centers, despite the release of Rs 14.43 crore to the Odisha Agro Industries Corporation, the report disclosed.