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KISAN CREDIT CARD SCHEME

Chahal's Gyan Ki Baat

 

INDEX

REFERENCE WITH UPSC-CSE SYLLABUS

ABOUT

BACKGROUND

IMPLEMENTED BY

OBJECTIVE

ELIGIBILITY

INTEREST SUBVENTION

WHY KISAN CREDIT CARD

PROBLEM FACED BY FARMERS

CHALLENGES

CONCLUSION

EXPECTED PRELIMS QUESTIONS

EXPECTED MAINS QUESTION

REFERENCE WITH UPSC-CSE SYLLABUS

  • General Studies-II, General Studies-III
  • Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.
  • Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

ABOUT

  • It is a scheme that offers credit to farmers across India so that financial inadequacy experienced by farmers during harvesting, crop cultivation and preservation of their crop can be lessen.

BACKGROUND

  • For issue of Kisan Credit Cards to farmers on the basis of their holdings for identical approval by the banks, in 1998 The Kisan Credit Card (KCC) scheme was introduced by National Bank for Agriculture and Rural Development on the recommendation of R.V. Gupta.
  • In 2004, it was extended for investment in credit necessity of farmers - allied and non-farm activities.
  • In 2012 by a working Group under the Chairmanship of Shri T. M. Bhasin, CMD, Indian Bank simplify issue of Electronic Kisan Credit Cards in the scheme and delivers comprehensive plans to banks for operationalizing the KCC scheme.
  • Executing banks will have the choice to accept the similar to suit institution/location particular requirements.
  • Under the supports of the respective State-Level Bankers’ Committees and District-Level Bankers’ Committees, banks have kick started a Kisan Credit Card  saturation campaign for providing Kisan Credit Card  loans to farmers who were not given such loan earlier.
  • An ATM-enabled RuPay debit card with services for one-time documentation, built-in cost appreciation in the limit, and any number of withdrawals within the limit, the scheme includes.
  • No interest subvention will be given if the Aadhaar numbers are not seeded to KCC accounts so banks will link Aadhaar straightaway.
  • In January 2013 NABARD set up Special Project Unit- Kisan Credit Card.
  • To issue Rupay KCC debit cards, it was done for encouraging cooperative banks and Regional Rural Banks across the country
  • Letting the farming community to get all new banking services as similar to urban area by developing cashless system.

IMPLEMENTED BY

  • RRBs
  • Cooperatives
  • Commercial Banks
  • Small Finance Banks

OBJECTIVE

To support farmers on:

  • Under a single window with flexible and basic procedure for cultivation in case suitable and appropriate credit support from the banking system.
  • Post-harvest expenses
  • Consumption requirements of farmer household
  • Marketing loan
  • To fulfill short term credit necessities for cultivation of crops
  • Working capital for maintenance of farm assets and activities allied to agriculture
  • For agriculture and allied activities, investment credit prerequisite (long term credit limit)

ELIGIBILITY

  • Tenant farmers
  • Oral lessees
  • Share croppers
  • Individual Farmers who are titleholder cultivators.
  • Joint borrowers who are titleholder cultivators.
  • Joint Liability Groups or Self Help Groups of farmers including tenant farmers, share croppers etc.
  • It include farmers involved in animal husbandry and fisheries.

INTEREST SUBVENTION

  • Up to ₹3 lakh to farmers at interest rate of 7 per cent per annum, short term crop loans.
  • By the government, PSBs and private sector commercial banks are offered interest subvention of 2 per cent.
  • Farmers who settle up in time, a supplementary interest subvention of 3 per cent per annum is provided to them.
  • Farmers repaying on time get short-term crop loans at 4 per cent per annum.
  • Farmers who repay their crop loans after one year of availing such loans, this benefit would not be applicable to them.
  • Elimination of inspection ledger folio charges and processing fee of loan under KCC.
  • Collateral free agriculture loan limit raise from ₹ l lakh to ₹1.6 lakh.

WHY KISAN CREDIT CARD

Farmers can freely procurement of agriculture inputs like:

  • Seeds
  • Fertilizers
  • Draw cash for their production needs.
  • Pesticides etc.

PROBLEM FACED BY FARMERS

  • Delay in credit delivery
  • Inadequate credit
  • Irrational credit limits on different crops.

CHALLENGES

  • Lack of supervision at the branch level is the biggest challenge.
  • Most branch officers are lazy, corrupt and money thirsty.
  • Money intended for the poor farmer is mostly misused in many cases.

CONCLUSION

  • The purpose of the scheme was to make economical credit open to the poor farmer. But many farmers draw such loans purposely for consumption reasons.
  • Banks lend money to them only to meet their priority lending target.
  • The hands that sow the seed for us are mostly cut by the greed of the intermediaries.
  • The system has generated them due to loopholes in various policies.
  • Offering to the agriculture sector is rising, but sector is not.
  • There is a need for more respect to a farmer who has unconditionally tills the soil for us, so that the moon can smile and the stars can shine more brightly at night and a farmer can get the pursuit of happiness which is taken by the blood thirsty intermediaries.

EXPECTED PRELIMS QUESTIONS

Q1. Consider the following statement regarding KISAN CREDIT CARD

  1. It is a scheme that offers credit to farmers across India so that financial inadequacy experienced by farmers during harvesting, crop cultivation and preservation of their crop can be lessen.
  2. To support farmers on Cultivation providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedure.
  3. To support farmers on Post-harvest expenses

Which of the following statement is correct?

(1) a and b 

(2) a and c

(3) All of the above

(4) None of the above

SOLUTION

STATEMENT A is correct because it is a scheme that offers credit to farmers across India so that financial inadequacy experienced by farmers during harvesting, crop cultivation and preservation of their crop can be lessen.

STATEMENT B is correct because scheme offers to support farmers on Cultivation providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedure.

STATEMENT C is correct because scheme offers to support farmers on Post-harvest expenses

 

Q2. Kisan credit card scheme is implement by

  1. RRBs
  2. Cooperative
  3. Commercial Banks
  4. Small Finance Banks

Which of the following statement is correct?

  1. a and d
  2. a and c
  3. a, b, c
  4. a, b, c ,d

SOLUTION

Kisan credit card scheme is implement by RRBs, Cooperatives, Commercial Banks and Small Finance Banks

 

Q3. The Kisan Credit Card (KCC) scheme was introduced on the recommendation of

  1. Nitin desai Committee
  2. Shekatkar Committee
  3. RV Gupta Committee
  4. Bimal jalan Committee

SOLUTION

For issue of Kisan Credit Cards to farmers on the basis of their holdings for identical approval by the banks, in 1998 The Kisan Credit Card (KCC) scheme was introduced on the recommendation of R.V. Gupta by National Bank for Agriculture and Rural Development.

EXPECTED MAINS QUESTION

Q1. Critically analyse KISAN CREDIT CARD scheme in addressing farmers issue in India.

Sources used:

The Hindu,The Indian Express, British Broadcasting Corporation News, Press Trust of India, Business Standard, The Economic Times