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Punjab’s farm debt crisis deepens as loans cross Rs 3 lakh crore; no relief from Centre

Despite mounting pressure from farmers and state officials, Centre has made it clear that farm loan waivers are not being considered

Reported by:  PTC News Desk  Edited by:  Jasleen Kaur -- February 04th 2025 12:06 PM
Punjab’s farm debt crisis deepens as loans cross Rs 3 lakh crore; no relief from Centre

Punjab’s farm debt crisis deepens as loans cross Rs 3 lakh crore; no relief from Centre

PTC Web Desk: Punjab’s agriculture sector is facing a severe financial crisis, with the state's total farm-related debt surpassing Rs 3 lakh crore. The debt is projected to exceed Rs 3.50 lakh crore by March 2025, raising concerns over the sustainability of farming in the state.

According to official data, Punjab's agricultural loan burden alone has crossed Rs 1 lakh crore, contributing to a growing economic challenge for farmers. The debt distribution among financial institutions is as follows: Private banks: Rs 85,460 crore; Cooperative banks: Rs 10,000 crore and  Regional rural banks: Over Rs 8,000 crore


The Central Government, in response to a question in the Lok Sabha, has confirmed the extent of Punjab’s farm debt but ruled out any possibility of a loan waiver. In response to a query, the government presented a report detailing outstanding agricultural loans in various states. The figures, sourced from the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD), indicate that all these debts remained unpaid as of March 31, 2024.

No relief from the Centre

Despite mounting pressure from farmers and state officials, the Central Government has made it clear that farm loan waivers are not being considered. Punjab’s financial distress has been exacerbated by declining agricultural incomes, rising input costs, and unpredictable weather patterns, making debt repayment increasingly difficult for farmers.

During the presentation of Punjab’s Annual Budget for 2024-25, state Finance Minister Harpal Cheema projected that the state's total debt burden could reach Rs 3.74 lakh crore by the end of the financial year. This would account for over 46% of Punjab’s Gross State Domestic Product (GSDP), raising alarms about the state’s fiscal health.

Growing concern over farmer distress

With no relief measures in sight, Punjab’s farmers continue to face mounting pressure from financial institutions. Many rely on loans for agricultural activities, but the growing debt burden is pushing them toward financial insecurity. Experts warn that without urgent intervention, Punjab’s farm sector could experience widespread economic distress, further impacting the state's rural economy.

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