You are not lending credit, you are lending debt: Johl

Eminent agriculture economist S S Johl today blamed banks and financial institutions for not evaluating proper demand of farm credit and monitoring it for effective utilisation, leading to "growing" indebtedness of farmers in Punjab.
"You are not lending credit. You are lending debt," Johl said while addressing a seminar organised by National Bank for Agriculture and Rural Development (NABARD) here today.
Asking the lenders to have an impact analysis of advances to the farm sector, Padma Bhushan awardee said non-performing assets of banks had been growing as loan entitled farmers' diverted money to non-productive work.
"Why Punjab has the highest debt. Because there is a high entitlement (of loan) and then farmer diverts money to non-productive work which does not generate repaying capacity and it then goes as NPA," he said.

"We are pouring food on the closed mouth," observed Chancellor of Central University, Punjab.
"We lack the evaluation... We do not evaluate the real need of farmer and it is a sure sign of farmers getting indebted," said Johl while pointing out that there was no such debt stress observed in states like Rajasthan and Gujarat.

"Where the money is spent, we never do (analyse). After lending, banks feel our work is done," said Johl who is a former Chairman of the Commission on Agricultural Cost and Prices.
He also lashed out at the government for granting loan waiver to farmers which had vitiated the credit culture.

Johl, who is also former Vice-Chairman of Punjab State Planning Board, was unimpressed with the survey being conducted by Punjab government to assess the extent of suicides in the state.
"Punjab government does again and again as it goes for survey (of number of farm suicides due to debt). These surveys have no meanings. Even if one suicide takes place, it should be a matter of concern. It is not number of suicides that matter," he said.
"Several times (surveys) it has been done. The utilisation of data is important and unfortunately Punjab does not do that," he said.
Three universities -- Punjab Agricultural University, Ludhiana; Punjabi University, Patiala and Guru Nanak Dev University, Amritsar had been asked by the state government to carry out survey to assess the extent of farmer suicides in the state due to high rural indebtedness.

The rural indebtedness in Punjab has been pegged at Rs 35,000 crore.