Govt, RBI discuss farmer relief package
RBI gov YV Reddy meets Prime Minister to discuss the recommendations of the Radhakrishna Committee on rural indebtedness and to devise a new package for farmers over the next two weeks.
By TNN |
NEW DELHI: Barely 18 months to the general election, farmers could expect a windfall. RBI governor YV Reddy met Prime Minister Manmohan Singh on Tuesday to discuss the recommendations of the Radhakrishna Committee on rural indebtedness and to devise a new package for farmers over the next two weeks.
The high-profile meeting was a follow up to the report to engage with rural indebtedness in a co-ordinated manner to oversee the implementation of the Rs 17,000-crore relief package. Finance minister P Chidambaram, Planning Commission deputy chairman Montek Singh Ahluwalia are understood to have attended the meeting.
The various options discussed included rescheduling of loans and waiver of interest burden up to two years, a one-time relief to farmers who are paying exorbitant interest to money lenders to be provided by banks through long-term loans among others.
The ministry of finance and the ministry of agriculture will draft the package. According to the report released recently, the causes for indebtedness include stagnation in agriculture, lack of institutional support, greater production and marketing risks and lack of livelihood opportunities.
The committee recommended better monitoring and implementation of the existing package of relief measures covering 31 distress affected districts, setting up a special fund, to be called the Money Lenders Debt Redemption Fund with a corpus of Rs 100 crore. The fund is a one-time measure of providing long-term bank loans to farmers so that they could repay their debts to moneylenders.
The report revealed that the average household borrowings by themselves have not been excessive, but due to modernisation and expansion, the credit needs of the sector have increased.
The high-profile meeting was a follow up to the report to engage with rural indebtedness in a co-ordinated manner to oversee the implementation of the Rs 17,000-crore relief package. Finance minister P Chidambaram, Planning Commission deputy chairman Montek Singh Ahluwalia are understood to have attended the meeting.
The various options discussed included rescheduling of loans and waiver of interest burden up to two years, a one-time relief to farmers who are paying exorbitant interest to money lenders to be provided by banks through long-term loans among others.
The ministry of finance and the ministry of agriculture will draft the package. According to the report released recently, the causes for indebtedness include stagnation in agriculture, lack of institutional support, greater production and marketing risks and lack of livelihood opportunities.
The committee recommended better monitoring and implementation of the existing package of relief measures covering 31 distress affected districts, setting up a special fund, to be called the Money Lenders Debt Redemption Fund with a corpus of Rs 100 crore. The fund is a one-time measure of providing long-term bank loans to farmers so that they could repay their debts to moneylenders.
The report revealed that the average household borrowings by themselves have not been excessive, but due to modernisation and expansion, the credit needs of the sector have increased.
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