Hyderabad: The Telangana government’s release of guidelines on Monday (July 15) outlining the write-off of crop loans up to Rs two lakh, has sparked widespread discontent among farmers and political circles. The controversy stems from the inclusion of interest in the Rs two lakh cap, which Opposition parties argue was not part of the ruling Congress’s original election promise, leading to accusations of reneging on their commitment.
After a Cabinet meeting on June 22, chief minister A. Revanth Reddy said in a press conference that the government will shortly issue an order laying down guidelines for the identification of beneficiaries under the crop loan waiver scheme, 2024 by Direct Benefit Transfer (DBT) with a budget of Rs 31,000 crore.
Flanked by his entire cabinet, he had said the scheme would apply for all loans borrowed in the previous Bharat Rashtra Samiti (BRS) regime from December 11, 2018, when the party won polls a second time to December 9, 2023, five days after Congress wrested power.
The announcement sparked significant unease among farmers, who were eagerly awaiting the guidelines ahead of the new crop season. Many farmers had refrained from clearing their outstanding loans to take out new ones, a usual practice at the start of the season, to purchase essential agricultural tools and inputs. Their apprehension stemmed from the fear that if their loan accounts showed a zero balance, they might not receive the credit they needed.
To their dismay, the guidelines came with a string of conditions that revolved around extending the benefit only to a family as a unit, with a cap of Rs two lakh, including interest. A family was described as its earning member, irrespective of whether it is headed by a man or his wife, and dependent children. The family must have agricultural land. The Food Security Cards (white ration cards) issued by the civil supplies department for below-poverty-line families will be used to identify families. It excluded members of families who had separated with their share of landholding but had borrowed loans. In that case, they would need to have separate ration cards to become eligible for the loan waiver.
There are an estimated 12 lakh applications pending in Telangana for several years for issue of ration cards. This meant old ration cards of undivided families alone will be considered. Additionally, the government required that the bank accounts, pattadar passbooks (title deeds), and ration card database of loan recipients be linked to a single Aadhaar number, emphasising that any discrepancies or mismatches would render them ineligible for the loan waiver.
Farmers organisations have said that there was a mismatch in Aadhaar numbers with loan accounts, pattadar passbooks, and ration cards of lakhs of farmers, as the linkage could not be completed. Moreover, about 15 lakh farmers failed to receive their pattadar passbooks due to issues with the State government’s Dharani portal for land transactions.
Morthala Chander Rao, state convenor of the Telangana Rythu Sangham said many divided families did not get ration cards in ten years of the BRS government.
Notably, the government stated in the guidelines that it would consider exemptions granted under the Pradhan Mantri-Kisan scheme “as required” for the practical implementation of the instant loan waiver scheme. The Pradhan Mantri-Kisan is an Information Technology solution for the pan-India implementation of the Pradhan Mantri Kisan Samman Nidhi, which provides farmers with a minimum income support of Rs 6,000 per annum.
The PM-Kisan envisaged that the scheme will not apply to all income tax payers, including Central and State government staff, public representatives like MPs, MLAs, Zilla Parishad and municipal chairpersons, Zilla and Mandal Parishad Territorial Constituency members and people holding constitutional posts.
Only short-term loans borrowed from scheduled commercial banks, regional rural banks, and district cooperative central banks and their branches are eligible for waiver. Rescheduled loans, being long-term, are excluded from the waiver. For the first time since the formation of Telangana State, a government order on loan waiver was issued in Telugu. Drafted in simple and easily understandable language by farmers, the order, issued in the name of Raghunandan Rao, Agriculture Commissioner, avoided using English words throughout. Although the BRS government attempted to issue orders, ordinances, statutes, rules, and manuals after the 2017 World Telugu Conference in Hyderabad, it did not come to fruition.
Speaking to The Wire, Sarampalli Malla Reddy, vice president of All India Kisan Sabha, said that there were 72 lakh farmers in Telangana, of whom 42 lakh had borrowed loans, and 31 lakh of them were PM-Kisan beneficiaries.
“The loan waiver scheme will also not apply to self help groups (SHGs), joint liability groups comprising five or more tenant farmers, rythu mitra groups which sell agricultural inputs on non-profit basis and loan eligibility card scheme holders under Tenancy Act, 2011. All of them are poor farmers belonging to Scheduled Castes, Scheduled Tribes and backward classes who are engaged in agriculture by borrowing loans but they will all be denied the benefit,” Reddy said.
He added: “The guidelines also left out farmers whose loans were rescheduled by banks due to natural calamities. In such cases, the bank announced a moratorium of four to five years for recovery of old loans and gave fresh ones. However, some instalments of loans repayable by farmers have remained during the period mentioned by the government but they will not be eligible to claim waiver.”
Also in the list of exemptions from the scheme are borrowings made by mortgaging loan and loan components in excess of Rs two lakh. The farmers will be asked to pay up the excess amount to claim credit for Rs two lakh. This is against the norms laid down by the Reserve Bank of India. In the sowing season from June to September, the RBI had barred recovery of loans, and instead, mandated banks to issue fresh loans, according to Reddy.
He expressed concern that the banks have started rescheduling loans by collecting interest post-December 2023 when confusion among farmers to repay old loans started. “The banks resorted to coercive methods of recovery,” he said, demanding that “the cut off date of December 9, 2023, by six months to bring relief to a larger number of farmers.”
The National Informatics Centre (NIC), Hyderabad, has initiated the process of filtering beneficiaries as the technological partner of the scheme, working in collaboration with the agriculture department to implement the various conditions.
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Telangana agriculture minister Tummala Nageswara Rao said the government was already equipped with information about farmers who took loans up to Rs two lakh. After their family credentials were confirmed, the process will begin for lower amounts of loan, he added.
Agriculture commissioner M. Raghunandan Rao told The Wire that about 30 lakh farmers were expected to benefit by the waiver. He said gold loans were not considered because of the service area approach of banks. The farmers might take loans from a bank branch which did not service areas where the farmers were engaged in agricultural operations.
The entire scheme was viewed as a follow-up of two phases of loan waiver up to Rs one lakh each taken up by the BRS from 2014 — when it first ascended power soon after formation of the Telangana state — to 2023, when the party was defeated.
Chief Minister Revanth Reddy said the BRS government disbursed only Rs 28,000 crore during its ten-year rule. He added that the previous government gave farmers Rs one lakh in each phase, released in four instalments after numerous postponements. Further, the chief minister underlined that the Congress is committed to clearing Rs two lakh in one go by August 15.
Refuting Revanth Reddy’s claims, former agriculture minister in the BRS government, S. Niranjan Reddy said the previous government distributed over Rs 29,000 crore by the time election code came into force in the last assembly polls; only Rs 6,440 crore was left undistributed. He asserted that the Congress launched a “false campaign” as if “nothing was done at all”. Niranjan Reddy described the latest guidelines of loan waiver as an eyewash and objectionable.
The agrarian crisis in combined Andhra Pradesh led to a separate Telangana agitation, with farmers’ suicides prompting former chief minister K. Chandrasekhar Rao to announce a crop loan waiver in two phases, Niranjan Reddy mentioned, adding that the Congress has now attached conditions to the waiver, limiting its benefits to only a few.
He pointed out that the Congress never indicated it would link the scheme to PM-Kisan, whose conditions were flawed. Niranjan Reddy accused the national party of encouraging farmers to take loans while in Opposition, only to now impose strict filtration methods to exclude many beneficiaries. He also questioned why the government took seven months to release the guidelines.
“The Congress was looking for escape routes to overcome its false promises. The guidelines created confusion in the minds of farmers and a rift between them (farmers) and officials. Political pressure was mounted on officials in these circumstances,” Niranjan Reddy added.
Another former BRS minister T. Harish Rao said the guidelines were aimed at filtering beneficiaries. He took exception to excluding pre-2018 loanees from the ambit of the scheme.
The Bharatiya Janata Party (BJP) floor leader in the state assembly E. Maheshwar Reddy said many banks had already recovered pending loans and showed in books of accounts as though the outstandings against farmers were fresh. The condition of ration cards posed the danger of denial of loan waiver to some members in case of multiple loan accounts within a family. But, Nageswara Rao said the Congress merely followed the 2018 loan waiver scheme of the BRS government. The Opposition parties did not want the Congress to take the big credit for waiving Rs two lakh in one go, he added.
