Telangana govt seeks loan relief for farmers hit by El Niño-induced drought

Telangana government on Tuesday requested bankers to ease the financial burden on farmers by restructuring and rescheduling their existing crop loans due to the distress in agriculture across the state caused by an El Niño-induced rainfall deficit.

Addressing a meeting of the State Level Bankers’ Committee (SLBC) on Drought Relief Measures for Kharif 2026, state deputy chief minister Mallu Bhatti Vikramarka, in-charge of finance portfolio, urged banks to extend fresh credit to farmers, enabling them to undertake the ensuing Rabi cultivation.

He said banks should examine the possibility of restructuring eligible agricultural loans under the applicable Reserve Bank of India (RBI) guidelines and consider interest rate concessions wherever feasible.

“A failed monsoon must not become a failed relationship between a farmer and his bank,” Vikramarka said, underlining the need for banks to stand by the farming community during the crisis.

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The deputy chief minister pointed out that the government declared 365 mandals across 31 districts drought-affected, with 111 being severely affected. The rainfall deficit damaged agricultural prospects and placed enormous pressure on groundwater resources, electricity supply, the State’s finances and farmers’ repayment capacity.

He cited the all-time peak power demand of 20,018 MW recorded on October 16 as evidence of the efforts farmers made to save their standing crops despite the adverse conditions.

Vikramarka said farmers invested their savings and borrowed money expecting a normal harvest, but the monsoon failure left them struggling to repay their loans.

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With the Rabi season approaching, banks should not limit their assistance to rescheduling existing loans but also provide timely, need-based fresh credit to eligible farmers, he said.

“The agriculture calendar does not wait for the financial calendar. Rescheduling previous loans is just part of the answer. Eligible farmers also need timely, need-based fresh credit,” he said.

He asked district-level officials to coordinate with banks and organise special outreach programmes in drought-affected mandals to ensure that farmers received the benefits of loan restructuring and other relief measures without delay.

Referring to the state government’s efforts to encourage farmers to shift towards less water-intensive crops, Vikramarka said the transition should be backed by adequate institutional credit, assured marketing arrangements and proper guidance on the risks involved.

State agriculture minister Tummala Nageswara Rao said the absence of significant inflows into the Krishna and Godavari rivers this year resulted in a substantial decline in reservoir storage levels. An estimated one million to 1.5 million borewells had also run dry, further aggravating the crisis in the agriculture sector, he said.

Tummala urged banks to achieve the Rabi season crop loan target of ₹38,268 crore to ensure farmers had access to adequate financial resources for the next cultivation cycle.

Beyond agriculture, Vikramarka called upon banks to support the government’s proposed Rajiv Yuva Vikasam scheme, scheduled for launch on November 19, aimed at providing assistance to unemployed youth to take up self-employment activities.

He also suggested that banks consider increasing lending to women’s self-help groups by at least ₹2 lakh per group. Such additional credit, he said, would improve liquidity in rural areas, generate economic activity and help revive the village economy affected by drought conditions.