State wants better deal for Vidarbha

MUMBAI: The Maharashtra government wants certain improvements in the Prime Minister’s special rehabilitation package on farmers’ suicides in Vidarbha.

The state government wants to propose interest waiver to farmers who have defaulted on loans taken during the previous two seasons so as to bring them under the formal credit coverage, a top official told ET after a review meeting chaired by chief minister Vilasrao Deshmukh on Monday.

The state government has also decided to suggest rescheduling of outstanding debt so that more farmers in six districts of Vidarbha become eligible for fresh credit, sources said.

Officials said if the Prime Minister’s Office (PMO) grants interest waiver and rescheduling of loans, the Rs 3,750-crore package declared on July 1, 2006, could go up to Rs 5,000 crore. “Allocations in addition to Rs 3,750 crore could also come for irrigation projects, dairy development, horticulture, and other agro-based industries that would fetch additional income to farmers,” said an official.

In August, when the PM made a review of Maharashtra’s agriculture scenario, the state had pointed out a phenomenal expansion in formal credit coverage that had brought a record number of farmers in the crop credit net.

The expansion of credit coverage was a result of the interest waiver declared by both the state and the Centre, rescheduling of loans, and an interest rate as low as 6%, officials had told the Prime Minister.

However, farmers have not been able to pay back debt they had taken after the relief measures were introduced and this had made them ineligible for fresh credit, officials said. “Ineligibility of farmers for fresh credit defeats the very purpose of removing the illegal money-lender from the village and extending formal sources of crop loan.

There has to be some relaxation in the eligibility criteria for seeking credit for Vidarbha to keep the momentum achieved in the last two years going,” an official said.The state would make a set of recommendations to the PMO within two-three days, sources said.