Farmers debt increased by 53% in the last 6 years

Tags: Economy/Finance

The Government of India has informed the Lok Sabha on 15 March 2022 that the farmers’ debts in the country have increased by 53% over the past six years.

In 2015-16 the total debt of the farmers to the scheduled commercial banks was Rs 12 Lakh crores which jumped to Rs 18.4 lakh crore in 2020-21.

• The number of such loan accounts increased from 6.9 crore to more than 10 crore.

• The growth of farmers’ debt burden is highest in Maharashtra, an increase of  116% in the outstanding amounts due over the six-year period. The state also has the highest agricultural loan  in the country with a total loan amount of Rs 5.5. Lakh crore. The State also consistently has the largest number of farmer suicides, as recorded by the National Crime Records Bureau.

• Other States which saw significant increase in farmers’ debt burden include Odisha (76%), Tamil Nadu (68%), Andhra Pradesh (65%) and Gujarat (64%). 

• The state which saw the highest  drop in the farmer debt was Karnataka, posting a 37% drop.

Concept Clearing 

Scheduled Commercial Banks 

Scheduled banks are those banks in India which are included in the second schedule of the Reserve Bank of India act 1934. These banks are all allowed to participate in the clearing house. They can participate in government business (buying and selling of government securities etc). They have to maintain Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) etc.

Commercial means these banks work for profit and earning profit is their main aim.

Which type of banks comes under the Scheduled Commercial Bank category in India? 

Public sector banks ; Banks in which the government of India holds 51% or more equity shares are called public sector banks. for e.g SBI, BOB, Canara Bank, PNB etc.

Private Sector Banks : Banks in which the non-government person (private persons)holds 51% or more equity shares are called public sector banks. for e.g HDFC Bank, ICICI bank, Yes bank, IDBI bank, Kotak Mahindra, Karnataka bank etc.

Foreign Banks : Banks in which foreigners hold 51% or more equity shares in the banks. For e.g  Citibank, HSBC bank, Standard Chartered Banks etc.