Making all out efforts to save Punjab’s peasantry from severe fiscal crisis, the Congress Government is mulling to bring in a new legislation fixing limit for the farmers to take loans.
The proposed law may also cover the commission agents — the biggest source of loans to the State’s farming community, and other lending institutions including the banks, regulating their functioning.
The issue was discussed at length during the meeting of the Cabinet Sub-Committee, formed to review the Agriculture Debt Reconciliation Act, 2016, to make it effective, broad-based and farmer-friendly, on Wednesday.
The three-member panel, comprising the state Finance Minister Manpreet Badal, local Government Minister Navjot Singh Sidhu, and Panchayat and Rural Development Minister Tripat Rajinder Singh Bajwa, batted for enacting a law to determine the limit of farmer debt, under which the arhtiya (commission agents) system and other loaning institutions will be regulated.
“The law would laid down how much loan can a lending institution or arhtiya can give and how much credit a farmer can take from these institutions to save them from trapping in the vicious circle of debt after the government waive off their debt,” said Manpreet, after the meeting.
“The government is very serious in its efforts to take out the state’s farming community out of the debt trap, that is why the state government had requested the Centre to enhance the borrowing limit by Rs 10,000 crore to help the State Government procure additional market loans for the debt waiver scheme,” said Manpreet.
He added, “To check that the farmers don’t fall in the debt trap again, the cabinet sub-committee today mainly discussed to enact a new law in this regard.”
Only a day before, Capt Amarinder had met the Prime Minister Narendra Modi and the Union Finance Minister Arun Jaitley in New Delhi urging the Centre to take some measures including relaxing Fiscal Responsibility and Budget Management (FRBM) Act, 2003, and enhancing borrowing limit, to enable the Punjab Government to meets its agriculture debt waiver commitments.
Punjab Government had already announced to waive off crop loans up to Rs two lakh for all small and marginal farmers, while providing debt relief up to Rs two lakh to marginal farmers having total debt of over Rs two lakh each. Besides, the state government had also decided to take over the total debt of suicide-affected families.
With total beneficiaries of 10.25 lakh farming families, the financial implication of these steps was to the tune of Rs 9,500 crore. The current annual borrowing limit at three per cent of the GSDP amounted to Rs 12,819 crore, leaving a gap of Rs 10,273 between revenue and expenditure, for which the government needed additional market borrowings to fund its Debt Waiver Scheme.
The meeting was also attended by Power and Irrigation Minister Rana Gurjeet Singh, MlA Rana Gurmeet Singh Sodhi and Punjab Farmers’ Commission chairman Ajay Vir Jakhar.
The state Cabinet, in its May 30 meeting, had decided to form a cabinet sub-committee to review the Agriculture Debt Reconciliation Act, 2016, as it was felt that the said Act was not favourable to the farmers and needed a review.
The panel was tasked with examining the provisions of 2016 Act for making it more effective and ensuring level playing field to all the stake holders, including farmers, arhtiyas and commercial banks.
The Congress party has all along been claiming that the agriculture sector in the state has been reeling under “mismanagement legacy”, which its newly elected government has inherited.