By Accommodation Times Bureau
The Punjab government has decided to streamline the system of money lending to farmers by fixing a limit on the advance on per acre of land, with the rate of interest also to be duly determined by the government.
The state cabinet, at a meeting chaired by Chief Minister Captain Amarinder Singh, has approved the introduction of the Punjab Settlement of Agricultural Indebtedness Bill, 2018, in the Vidhan Sabha session beginning today.
The Bill, aimed at further relieving the state’s farmers from the vice of debts, saving them from the clutches of unauthorized money lenders who charge exorbitant rates to give unlimited amounts as loans.
With the enactment of the Bill, only licensed money lenders will be allowed to advance the money, with lending by others deemed to be illegal. Only these licensed money lenders will be allowed to move the debt settlement forums, which will be headed by Commissioners. The lender would be required to submit proof of the amount lent to the farmer, an official said.
The decision to amend the existing law on farm loans has been taken to curb the growing trend of agricultural indebtedness, resulting in a mismatch between the prices of agricultural inputs and minimum support price of agricultural produce.
The farmers raise loans from both institutional and non-institutional resources. However, while the institutional loans are regulated through various special legislations governing the institutions providing such loans, non-institutional loans are largely unregulated having no mechanism for redressal of grievances of a debtor.
In the light of this, the Government has thus enacted the Punjab Settlement of Agricultural Indebtedness Act, 2016 which provide a framework for regulation and settlement of agricultural debt.