A Punjab farming household borrows from three places: the primary agricultural credit society and the cooperative bank, the commercial banks, and the arhtiya.
Institutional credit is cheaper and is limited by land title, by the crop loan formula and by existing arrears. Arhtiya credit is instant, requires no paperwork, and is expensive.
The gold loan sector has grown very fast in Punjab, because a household's jewellery is the asset most easily pledged and most quickly redeemed.
Loan waivers have been announced by successive governments, covering different categories and different amounts, and each has been partial. A waiver that covers institutional debt does not touch the arhtiya debt that is doing the damage.
Every study of farm suicides in Punjab finds non-institutional debt at the centre. Every waiver addresses the institutional part, because that is the part the state can see.
The arhtiya is the commission agent in the mandi and he is also the lender. He advances against the standing crop, deducts at sale, and the interest is not written down anywhere.
That arrangement is why the non-institutional share of farm debt in Punjab is high in a state with good formal banking coverage. The credit is tied to the sale, which no bank can match for convenience.
Every loan waiver announced has covered institutional debt, because that is the debt the state can see. The arhtiya's book has been untouched by all of them.