Rajasthan

Raj readies bill to provide relief on non-repayment of farm loans | Jaipur News

JAIPUR: Rajasthan’s Ashok Gehlot-led Congress government will present before the assembly on August 2 a proposed law that aims to prevent auction of farmers’ land in case they fail to repay loans, and allows for rescheduling and waiver of such debt.

Through the Rajasthan State Farmers’ Debt Relief Commission Act, 2023 – being brought ahead of assembly polls later this year – the government aims to reach out to farmers who often suffer crop loss due to famine, flood, heavy rain, hailstorms and other natural calamities.
Outstanding cooperative loans in the state are estimated at over Rs 10,000 crore, owed by over 15 lakh farmers for years.

The bill proposes a farmers’ debt relief commission, a quasi-judicial body. The body will be empowered to declare an area – land owned by one or more farmers – “distressed” based on an application by them for assessment.
The bill defines a distressed farmer as someone not able to repay loans due to damaged crops. “If the commission declares an area or a farmer as ‘distressed’, no bank or financial institution will ably take any action to recover the loan, such as confiscating their properties or auctioning them,” said an official.
The commission will have powers equivalent to those of civil courts, making their decision unchallengeable in such legal forums. “As long as the case remains pending with the commission, any lawsuit, application, appeal, or petition against the farmer cannot be exercised or remain banned,” reads the bill.
The commission will be empowered to reschedule short-term loans into medium-term ones and medium-term loans into long-term ones for “distressed” farmers.
Commission to have five members
Jaipur: “The commission will provide facilities for one-time settlement of agriculture loans falling under the category of non-performing assets. Also, waive penal interest as per norms fixed by the RBI,” reads the bill.
The commission will have five members, including a retired high court judge as its chairman. “The commission will also be able to recommend to the government to waive farmers’ loans,” the bill states. This potentially reduces troubled farmers’ obligation to repay loans taken from banks and cooperatives, which has earlier resulted in auction of their land and, in some cases, even suicides.

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