Farmer debt relief gets nod for Rs 10,000-crore starter pack
The Union Cabinet on Thursday approved the setting up of a farmers’ debt relief fund with an initial corpus of Rs 10,000 crore.
By TNN |
NEW DELHI: The Union Cabinet on Thursday approved the setting up of a farmers��� debt relief fund with an initial corpus of Rs 10,000 crore, paving the way for implementation of the farm loan waiver scheme announced in the Budget to help about four crore farmers.
The government will initially provide Rs 10,000 crore to the fund, which has been earmarked in the supplementary demands for grants for 2007-08. The fund will be augmented by another Rs 50,314 crore in the next four years to compensate banks and other lending institutions.
The Rs 60,000-crore debt waiver scheme announced by finance minister P Chidambaram in Budget 2008-09 will be implemented by June 30. The debt waiver and debt relief scheme will benefit three crore small and marginal farmers and one crore other farmers.
In addition to Rs 10,000 crore earmarked in 2007-08 for funding the scheme, the government will provide Rs 15,000 crore each in 2008-09 and 2009-10, Rs 12,000 crore in 2010-11 and Rs 8,314 crore in 2011-12.
Pointing out that the implementation of the scheme will mitigate hardships faced by farmers, an official spokesperson said, ���Upon being granted the debt waiver or signing an agreement for debt relief under the one-time settlement, the farmer will be entitled to fresh agricultural loans from banks.���
According to the scheme, all farm loans disbursed by banks and cooperatives up to March 31, 2007 to an estimated three crore small and marginal farmers will be waived. Marginal farmers are defined under the scheme as those holding up to one hectare of land, while small farmers are those who have 1-2 hectare under their possession.
Under the one-time settlement scheme for other farmers, they will get a rebate of 25% if they pay the balance 75% of their outstanding loan.
All agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007 will be covered under the scheme, Mr Chidambaram had said in his budget proposal.
The implementation of the debt waiver and debt relief scheme will be completed by June 30, 2008.
The government will initially provide Rs 10,000 crore to the fund, which has been earmarked in the supplementary demands for grants for 2007-08. The fund will be augmented by another Rs 50,314 crore in the next four years to compensate banks and other lending institutions.
The Rs 60,000-crore debt waiver scheme announced by finance minister P Chidambaram in Budget 2008-09 will be implemented by June 30. The debt waiver and debt relief scheme will benefit three crore small and marginal farmers and one crore other farmers.
In addition to Rs 10,000 crore earmarked in 2007-08 for funding the scheme, the government will provide Rs 15,000 crore each in 2008-09 and 2009-10, Rs 12,000 crore in 2010-11 and Rs 8,314 crore in 2011-12.
Pointing out that the implementation of the scheme will mitigate hardships faced by farmers, an official spokesperson said, ���Upon being granted the debt waiver or signing an agreement for debt relief under the one-time settlement, the farmer will be entitled to fresh agricultural loans from banks.���
According to the scheme, all farm loans disbursed by banks and cooperatives up to March 31, 2007 to an estimated three crore small and marginal farmers will be waived. Marginal farmers are defined under the scheme as those holding up to one hectare of land, while small farmers are those who have 1-2 hectare under their possession.
ADVERTISEMENT
Under the one-time settlement scheme for other farmers, they will get a rebate of 25% if they pay the balance 75% of their outstanding loan.
All agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007 will be covered under the scheme, Mr Chidambaram had said in his budget proposal.
The implementation of the debt waiver and debt relief scheme will be completed by June 30, 2008.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
