Chandigarh: Newly released figures on agricultural lending have revealed striking imbalances in how farm credit is distributed across India, with Chandigarh standing out as an unusual case. Data presented in the Rajya Sabha shows that the Union Territory, despite having very limited agricultural activity, has the highest average farm loan per borrower in the country.
According to the information placed before Parliament, Chandigarh has roughly 8,000 agricultural loan accounts with total outstanding dues of ₹3,068 crore. This works out to an average of ₹38.35 lakh per account — far exceeding figures recorded anywhere else in India.
Economists caution that these numbers should not be read as evidence of farmer distress in Chandigarh. Instead, they point to structural issues in agricultural lending in highly urbanised or peri-urban areas. Land prices around Chandigarh run into crores of rupees per acre, enabling landowners to pledge high-value collateral and secure large loans classified as agricultural. In many cases, experts say, the borrowed funds may have little connection with actual farming activity.
Auditors and policy analysts have long raised concerns that subsidised farm loans — which carry benefits such as reduced interest rates, government subventions and occasional waivers — can be misused in regions where land values are exceptionally high. Such loans, they argue, may be channelled into property transactions, commercial ventures or financial investments, particularly when monitoring mechanisms are weak.
The situation in Chandigarh is further skewed by the small number of loan accounts. Even a limited set of high-value borrowings can sharply inflate the average loan size, making comparisons with agrarian states misleading.
The data, shared by Minister of State for Finance Pankaj Chaudhary in response to a question in the Rajya Sabha on December 16, also places Delhi second on the list. The national capital has over 4.14 lakh agricultural loan accounts with outstanding dues of ₹26,998 crore, resulting in an average loan of ₹6.52 lakh per account. As with Chandigarh, the figures have prompted questions about the actual use of farm credit in a predominantly urban setting.
In contrast, traditional farming states show a different and more troubling picture. Punjab, for instance, has more than 25 lakh agricultural loan accounts with total dues of ₹97,471 crore. This places the state fourth nationally in terms of per-account debt, at an average of ₹3.86 lakh, reflecting sustained financial pressure on its farming community.
Advocate Kamal Aanand from Sangrur, who has examined the data closely, said the divergence between urban regions and agricultural heartlands is difficult to justify. “It is hard to explain how such massive farm loans are sanctioned in places like Chandigarh and Delhi, where agriculture barely exists. Meanwhile, genuine farmers in states like Punjab are sinking deeper into debt,” he said, calling for a detailed investigation into the end-use of concessional agricultural loans.
Neighbouring Haryana presents a relatively lower average burden. With 36.63 lakh loan accounts and outstanding agricultural credit of ₹1,00,013 crore, the state ranks seventh nationally, with an average loan size of ₹2.73 lakh per account. Aanand noted that Punjab’s higher average debt points to long-standing policy failures and inadequate support systems, adding that rising debt levels are often linked to farmer suicides.
At the other extreme, northeastern and eastern states report much smaller loan sizes. Meghalaya has the lowest average agricultural loan in the country at just under ₹77,000 per account, with 1.45 lakh borrowers and total dues of ₹1,116 crore. Jharkhand, frequently described as economically underdeveloped, shows a similar pattern, with an average of about ₹78,350 across more than 28 lakh accounts. Analysts say these figures reflect limited access to institutional credit rather than financial comfort.
Taken together, the numbers underline how dependent Indian agriculture remains on borrowing. Nationwide, there are around 17.42 crore agricultural loan accounts with outstanding credit of ₹31.36 lakh crore, averaging ₹1.80 lakh per account. Tamil Nadu tops the country in terms of total agricultural lending volume at ₹4.94 lakh crore, followed by Andhra Pradesh with ₹3.76 lakh crore.
The contrast between soaring per-account loans in urban regions and mounting debt in farming states has renewed debate over how agricultural credit is targeted and monitored. Experts argue that unless lending norms are tightened and oversight strengthened, concessional farm credit risks drifting further away from the farmers it is meant to support.
