Idhar Udhar Exclusive: Acche din of whom? Anti-farmer Modi sarkar to increase interest rate on KCC loan

Farmers will have to pay more interest on the Kisan Credit Card(KCC) loan as Modi-led NDA government has withdrawn the consumption credit from KCC. Banks will charge 11 to 14% interest on the amount of this loan. In this case, farmers will be required to pay 7% interest on 80% loan and 14% interest on the remaining 20% loan. About two thousand crore burden of interest has increased on the farmers.

After Indian government's order, NABARD  chief general manager AD Ratnoo has issued the instructions. It has been told that bank will claim subsidy on the crop credit. But farmers are in the dilemma for the calculation of more interest as no proper information has been given by bankers. The credit of 1,01,090 crore was given to the 10 cr 83 lakh farmers in the country. While, credit of 7560 cr was given to the 71 lakh 73 thousand farmers of Rajasthan.

According to the bank officials, the limit of KVC loan was used to be decided on the basis of six points. Crop loan is decided on the basis of production and land. The 20% of crop loan has been included in consumption(for the maintenance of pump, dairy and other requirements) loan. Like this, KCC loan has been divided in two parts - crop and consumption. RBI has abolished the concession in the interest of KCC's similar consumption.


Review of KCC due to increase in expenditure
RBI has reviewed the KCC due to rise in the expenditure of concession on KCC loan. The findings of review revealed that financial burden has increased due to the concession of 5% on the KCC.

No option for leaving the consumption loan
Farmers who have already taken the KCC from bank have no option to left consumption loan as consumption and crop loan is combined in the old accounts of KCC. Now, banks are imposing different interests on 80% and 20% loan. Whereas, new farmers want to repay the consumption loan. However, banks also have no clear guidelines from the headquarter regarding this.

Concession in interest upto three lakh
KCC loan can be approved upto Rs three lakh . Nine percent interest rate on this loan in actual. The 2% loan is collected from government and remaining 7% from farmers. The government  gives three percent concession to the farmers who deposit the credit back on time once in a year. That means, farmers gets KCC loan on four percent interest.

The mathematics of concession on the KCC of one lakh Earlier Loan: One lakh rupee Interest: 7000 Rs(7% annually) Concession: 3000 Rs(for depositing the installement on time) Actual amount farmer had to pay: 4000 Rs Now Crop loan: 83000 Rs Interest: 5810 Rs(7% annually) Concession: 2490 Rs(for depositing the installment on time) Actual amount farmer had to pay: 3320 Rs Consumption loan: 17000 Rs(on the general interest rate of bank. Such as 13%) Interest:2210 Rs Concession: Nothing Actual amount farmer had to pay: 2210+3320=5530 Rs

                                                                 

 

Nationwide scenario (Source: RBI and NABARD)
State	KCC	Loan
Andhra Pradesh	18792383	20 cr
Maharashtra	9371583	10150 cr
Tamil Nadu	7782876	9840 cr
Madhya Pradesh	7764282	6320 cr
Rajasthan	7113447	7560 cr
Karnataka	8560044	7200 cr
Orrisa	6370481	1000 cr