‘All cash financing for Rs.600 bn debt waiver for farmers’

March 14th, 2008 - 8:26 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, March 14 (IANS) Finance Minister P. Chidambaram Friday said the grand debt waiver scheme of Rs. 600 billion ($15 billion) for an estimated 40 million farmers will be funded fully in cash with two-third disbursal in just 15 months. “We will complete two-thirds of the package in just 15 months,” Chidambaram told the Lok Sabha, the lower house of parliament, adding the provisional estimates indicate that the package will finally involve Rs.602.216 billion.

The package, he said, will be finalised by June 30 and the funding will conclude fully in three years thereafter. The original announcemnt was made as part of the finance minister’s budget speech on Feb 29.

“I am very confident we can finance the burden of this order by regular budget exercise,” he said, adding the legroom was possible due to high economic growth and fiscal prudence during the regime of the United Progressive Alliance (UPA).

The finance minister said that the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (Nabard) had been asked to give their assessment on the extent of debt and intended beneficiaries by March 14.

“I am happy and proud that in the third supplementary for this year itself, I have been able to keep aside Rs.10,000 crore (Rs.100 billion) to kick start the farmers’ debt relief fund.

“That we are able to establish the fund in year zero itself, and that too with a substantial contribution of Rs.10,000 crore is demonstration of the UPA government’s determination to ensure that the debt waiver programme is fully financed.”

The finance minister also said that the funding would see 54 percent being set aside for cooperative institutions, 36 percent for scheduled commercial banks and 10 for regional rural banks.

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