Saturday, April 26, 2008

Govt Holding Consultations On Loan Waiver Scheme

New Delhi: The Finance Minister, P. Chidambaram, said on Friday that he would impress upon chief executives of public sector banks, at their meeting on May 1, to continue their “normal lending operations” to debt-distressed farmers, pending finalisation of guidelines for the Rs 60,000-crore loan waiver scheme.

He was responding to supplementaries during the Question Hour in Lok Sabha on the question raised by members Haribhau Rathod and Chinta Mohan on the farm debt waiver and debt relief scheme. The agitated members drew the attention of the Finance Minister to banks’ reluctance to provide fresh loans to farmers (who are beneficiaries of the scheme) in the absence of guidelines from Reserve Bank of India (RBI) to various banks for implementing the loan waiver scheme.

“The guidelines would be finalised in consultation with the RBI and the National Bank for Agriculture and Rural Development (Nabard). I had given myself time of March, April and May to hold consultations to finalise the guidelines. But, let me repeat my assurance already made to this House. By June 30, the loans will be waived,” Chidambaram said.

On a suggestion that the land holding limit for availing of the debt waiver scheme should be raised, Chidambaram said that every suggestion made on the debt waiver and debt relief scheme was under examination. “I can do what is doable and what is affordable,” he said.Meanwhile, in a written answer, Chidambaram said that guidelines which are in the process of being drafted will be issued by the RBI and Nabard to enable completion of implementation of debt waiver scheme by June 30,.

The Finance Minister also said that the suggestions for modifying the scheme broadly relate to varying the land- holding criteria taking into account the irrigation status or productivity; doing away with the land holding criteria; inclusion of those farmers in the scheme who have taken loans from moneylenders; and extension of the debt waiver and debt relief scheme to farmers who have paid their loans in time.

The Government has already set up a farmers’ debt relief fund with initial corpus of Rs 10,000 crore to fund the debt waiver and debt relief scheme.

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