India hikes farm debt waiver limit to Rs.716 bn (Lead)

May 23rd, 2008 - 4:36 pm ICT by admin  

A file-photo of P. Chidambaram

New Delhi, May 23 (IANS) India’s cabinet Friday raised the net amount available for the ambitious farmer loan waiver scheme to Rs.716.8 billion from the Rs.600 billion set aside when the announcement was made end-February. Finance Minister P. Chidambaram, who made the announcement here after a cabinet meeting presided over by Prime Minister Manmohan Singh, said the move was necessitated by the revision in the estimates of beneficiaries of the scheme.

Against the original estimate of 30 million small and marginal farmers and 10 million others who were to benefit from the scheme, the current estimates are 36.9 million and 5.97 million, respectively, the finance minister said.

A fresh set of guidelines for availing of the loan-waiver scheme will also be announced, he said, adding that farmers will be eligible to take loans from banks soon after the waiver scheme is complete by June end.

“We are discharging the debt we owe to farmers. The government is taking over the debt of our farmers and reimbursing the banks,” said Chidambaram.

He further informed that a committee has been constituted to monitor the scheme. “I will myself travel and do spot visits and see how the farmer waiver scheme is being implemented at the ground level.”

Farmers would be eligible to take farm loans from banks soon after the scheme - that covers direct agricultural loans extended by banks and cooperative credit institutions - is complete by June end, he said.

In the case of a small and marginal farmer, the entire eligible amount would be waived, while for other farmers, there would be a one-time settlement scheme and a 25 percent rebate of the eligible amount would be extended.

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