NEW DELHI: A high-power Working Group on Agriculture under the National Development Council (NDC) does not favour an across-the-board waiver of farm loans as demanded by various States, including Punjab. Instead, it has suggested that an independent forum or board be constituted at the district level under a one-time settlement scheme of banks and decide the amount they may charge from borrowers. The forum, headed by "an independent professional," can also settle the loans taken from moneylenders at usurious rates.

"Such a system will help in implementing a uniform system of one-time settlement scheme among all banks and simultaneously provide the much-needed relief to farmers" who are under the clutches of moneylenders, the group said.

The group, chaired by Planning Commission Member Abhijit Sen, has recommended in its report to the Government that the Transfer of Property Act be amended to remove the concept of notified cities for creation of mortgage by depositing title deeds. It suggested that the law be amended to allow farmers to mortgage their land or offer it as security against loan in any notified area by depositing title deeds, not just in notified metropolitan cities as provided for now.

The Group has suggested that either the concept of notified cities for creation of mortgage by deposit of title deeds be removed or States notifiy panchayat headquarters for creation of mortgage by deposit of title deeds. The stamp duty on farm advances may be exempted or reduced.

Proper records

To enable farmers to offer land as security, land records may be maintained properly. Issue of credit passbooks containing details of land records should be made mandatory by States "so that multiple loans with the land as security can be avoided."

Performance indicator

The group has also suggested "Universal Access to Financial System" as a major goal for rural financial institutions that should be included as a main performance indicator for the banks. The State Governments will have to play a major role for achieving this goal.

Universal access should include opening of a bank account and provision of the Kisan Credit Card (KCC) to all farmers in a time-bound manner. The KCC limit may be enhanced from Rs. 50,000 to Rs 1.50 lakh and the validity extended to five years.

A Credit Information Bureau should be set up for rural areas with provision of smart/biometric cards to farmers to facilitate sharing of information about borrowers.

Rural poor

Panchayats, non-governmental organisations and civil society organisations could identify the rural poor who were "still" not able to access institutional credit sources adequately and furnish a list to banks. People "excluded" should form self-help groups.

The recommendations will be discussed at a full meeting of the Planning Commission before being placed at the NDC meeting later this month.

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