The Union Finance Minister Mr.P.Chdambaram announced in the Lok Sabah on Friday that the entire amount of Rs.60,000 Crores arising out of the ‘Farm Loan Waiver’ would be made good by infusion of cash to the affected Banks over a period of three years. As per the current estimates, the total relief would work out to to Rs.60,314 Crores. This comprises of Rs.50,524 Crores for small and marginal farmers and Rs.9790 Crores to others to be covered under one time settlement at 25% of their over dues subject to their settling the balance amount.
The cash infusion pattern is as follows: A sum of Rs.10,000 Crores is already allocated for disbursement immediately and a further amount of Rs.15,000/- Crores would be provided after 30th June 008. Rs.15000 Crores for 2009-10, Rs.12,000 Crores for 2010-11 and Rs.8,000 Crores for 2011-12 are planned to be provided.
The method of funding by and large is expected to be through budgetary provisions. The Finance Minister is confident of this in view of buoyancy in tax collections;however, the Government may also resort to borrowing, but, this would be done only as a last resort.
While the Government was sympathetic to the demands of the Members that something should be done to release the farmers from the clutches of private money lenders, it cannot do much in reality as this is a State subject. They can make use of ‘debt swap scheme’ introduced by his Government which provided an opportunity to farmers to take loans from the Banks to settle their private debt.
The suggestions of Mr.Rahul Gandhi was acknowledged by the Finance Minister by saying that the Government would try to incorporate them to the extent possible in consultation with Reserve Bank of India (RBI) and National Bank and Agriculture and Rural Development (NABARD).
Mr.Chidambaram was keen in completing the ‘Loan Waiver Scheme ‘ by 30th June 008 which would enable the farmers to become eligible for further loans. The scheme is expected to benefit three croe small and marginal farmers and one crore other farmers.
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