The prolonged dry spell this kharif season has been a shock for farmers. The Karnataka government is estimated to have lost about Rs 1,387 crore worth of crops due to the drought. After a dry spell, here is some succor in sight.
The state recently launched a scheme to provide 3% subsidy cushion to small farmers, with crop loans of up to Rs 50,000 crore for disbursal this fiscal. The state government issued a notification to all the banks on Tuesday extending the scheme to all commercial banks and regional rural banks (RRBs).
“The incentive is applicable to farmers who repay promptly. The state government will reduce the subsidy from 4% to 3% on prompt repayment. Overall, farmers can avail a 7% subsidy from both the central and state governments,” said Dilip Mavinkurve, MD, State Bank of Mysore (SBM).
Rains played truant duringthe crucial months of June and July, affecting 16 lakh hectare of crops in the state. Farmers in Karnataka have sown 66 lakh hectare of Kharif crops.
SBM has disbursed agri loans to the tune of Rs 500 crore during March-September 2009, of which 20% comprises small borrowings of up to Rs 50,000. With the projection for advances estimated at Rs 8,000 crore, the bank plans to disburse Rs 1,440 crore agri loans till March 2010, said A Ramakrishnan, chief general manager, SBM.
To assist farmers, the finance ministry has extended the deadline of the Agriculture Debt Relief and Waiver Scheme from June to December 31, 2009. The scheme is a one-time settlement where a farmer can avail 25% rebate, on the pre-condition that he will pay the balance 75% in three installments. SBM’s debt outstanding under the scheme is Rs 250 crore of which 65% (Rs 162 crore) has already been received by the bank in two installments.
On the auto front, the bank is upbeat about a revival with pick up in vehicle sales. “Disbursals will exceed 35% as compared to last year, which is largely driven by reduced interest rates,” said Mavinkurve. Vehicle loan offtake is expected to touch Rs 350 crore in March 2010 from Rs 291 crore in the same period last year.
Between March and August, auto loans grew 150% to Rs 30 crore from 12 crore in the same period last year.The bank has opened 25 branches in the first half of the year. It will add 30 more by this year end which will be spread across the state.
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