Nation wrote off its debt to farmers: Chidambaram

March 8th, 2008 - 7:24 pm ICT by admin  

A file-photo of P. Chidambaram

Kundrakudi (Tamil Nadu), March 8 (IANS) The fear of losing farmers to other vocations was one of the underlying factors that prompted the central government to waive Rs.600 billion ($15 billion) worth of loans to the agriculture sector, which is already facing low growth and stagnating productivity, Finance Minister P. Chidambaram said here Saturday. “The nation actually wrote off the debt it owed the farming community as there is a possibility of them quitting agriculture itself,” Chidambaram said while inaugurating the 2,596th branch of Bank of India in Kundrakudi in Sivaganga district.

He was alluding to the fact that the country of 1.17 billion people would be ill served if it is not self-sufficient in food production and farmers were not given a helping hand to boost productivity.

The finance minister also expressed his surprise over the opposition stand on the loan waiver, saying they were the ones who had been clamouring for it.

According to him, the farming community was the most honest of borrowers who would pay their loans even by pledging their ornaments.

He said he would explain to parliament how the government intended to waive off the loans - which essentially means compensating the banks for their credit exposure to farmers - much of which had resulted in adding to the financial system’s debt, often referred to as non-performing assets.

Chidambaram is to also inaugurate the 10,000th branch of State Bank of India in Puduvayal village, also in Sivaganga, which is his constituency.

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