Chandigarh, Jan 20: Chandigarh has emerged as the national leader in agricultural debt per account, revealing a significant gap between loan disbursement and actual farming activity.
Data recently presented in the Rajya Sabha by Minister of State for Finance Pankaj Chaudhary shows that while the Union Territory has negligible cultivable land, its average agricultural loan stands at a staggering Rs 38.35 lakh per account.
The city currently holds 8,000 agricultural loan accounts with a total outstanding debt of Rs 3,068 crore.
This figure far exceeds the national average of Rs 1.80 lakh per account. Experts suggest the trend is driven by high-value real estate rather than traditional cultivation. Because land in and around the city is worth several crores per acre, owners can leverage substantial collateral to secure large loans at concessional interest rates.
“It is beyond explanation how an average agricultural loan of Rs 38.35 lakh could be justified in Chandigarh, where there is hardly any land for farming,” said Advocate Kamal Aanand of Sangrur, who analyzed the federal data.
He noted that the pattern suggests a diversion of funds, adding, “It appears that low-interest agricultural loans are being diverted for non-agricultural purposes, which calls for a deeper probe.”
The trend extends to other urbanized areas, with Delhi ranking second in per-account debt. The national capital holds 4.14 lakh accounts with an outstanding balance of Rs 26,998 crore, averaging Rs 6.52 lakh per account.
Economists have frequently noted that these loans, which benefit from interest subvention and periodic waivers, often find their way into business expansions or financial investments rather than crop production.
In contrast, major agrarian states show much lower per-account averages despite having higher total debt volumes. Tamil Nadu leads the country in total loan volume at Rs 4.94 lakh crore, followed by Andhra Pradesh.
The stark difference between the high-ticket loans in urban centers and the smaller loans in rural regions continues to raise questions regarding the monitoring of institutional credit.
