Initializing the step of waiving off hefty Rs.60,000 crore farmer’s loan, Finance Minister P Chidambaram on Tuesday asked from the Lok Sabha members to approve the supplementary grant of Rs.10,000 crore as a part of loan write-off from the budget for this fiscal year 2007-2008.
Asking for this grant from the current fiscal, Finance Minister has revealed the government’s strategy of waiving off the robust loan without putting extreme burden over government as well as banks. The banks were not pleased with the FM’s decision of leaving heavy unpaid loans. Now, this step of finance minister would heal the banks’ wound of leaving heavy unpaid loan because this granted money would be used to compensate the regional rural and cooperative banks.
After getting approved of the grants, finance ministry would now be able to allocate more money in the next fiscal’s budget that was announced on February 29, 2008. Though the amount of Rs.10,000 crore is the part of immense farmer’s loan and the granted amount can compensate the regional rural and cooperative banks, while the NPA of the urban and commercial banks are too big to repay.
Finance Minister has assured the remaining banks to compensate them too. For this, FM has sought to approve the gross additional expenditure of approximately Rs 1,40,379 crore from the Lok Sabha members in which cumulative net cash outgo is Rs 43,060 crore. The remaining Rs.97,318.16 crore would be extracted from the savings of the ministries and departments. Out of net cash outgo a large portion of it 87% (Rs. nearly Rs 37,479 crore) is non-Plan expenditure.
The revenue collection of this fiscal year has boosted due to high growth rate that has reduced the fiscal deficit for 2007-08 from estimated 3.3% to 3.1% while the revenue deficit was pegged at 1.4%. Government has set the target of 2.5% of fiscal deficit for the next fiscal 2008-09.
After exposing the budget on February 29, Reserve Bank of India has asked banks to provide the detailed NPA data, so that government can assess its liability. On the other hand, National Bank for Agriculture and Rural Development (NABARD) has instructed regional rural banks and cooperative banks to compile state-wise data on NPAs relating to farmers’ loans and submit to finance ministry within a month.
FM has announced in tabled budget for 2008-09 to grant the Rs.60,000 crore debt relief to small and marginal farmers who have been declared as defaulters. The rule of waiving off the debt would be imposed on those, who had taken the loan before March 31, 2007 and were being declared defaulters till December 31, 2007. But, now FM has extended the time limit. Now, the farmers who have been declared defaulters by February 29, 2008 will also be benefited from this loan waiving policy. Rest of the farmers will not be entertained. Here, the term small and marginal farmers refer to those who have less then 2 hectares farmland.
No announcement has come from the government to those farmers who have paid their debts well before in time. However, a group of banks have suggested the governments to provide incentives as a reward for repaying the debts on the time period. This will motivate the farmers.
Chidambaram has also assured the big farmers to offer them one-time settlement scheme to completely eradicate the farmer’s loan after completing this loan-waiving scheme that is scheduled to complete till June 30, 2008. Government is also considering about to completely wiping out bad assets of non-farm sectors’ credit as well. The government will also examine about the available credit for those farmers who depend upon non-far activities for their survivals.
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Read More: Chidambaram | Bangalore Rural
Comments:
absar
November 4, 2008 at 12:00 AM
mazid ali
August 4, 2008 at 12:00 AMi am mazid.my father is a farmer.i have less than 2 acre land.my father take 30000 loan from PNB haridwar district bank in 2005.but now bank says that apka loan maaf nahi hoga.sorry my english is not good.to sir ab aap bataye main kya karu.hamne loan 2007 se pehle liya hai.aur credit card par liya hai.to sir hamara loan maf hona chahiye tha.magar bank lagata hai sara paisa kha raha hai.ab ham kya kare sir.please tell me.please help me on this topic
My father is a farmer and has taken a loan. He ha deposited the money in the Month of May-2008. Now he has got a letter stating that your laon has been waive off. The bank manager did not told anything regarding the waive off and taken the money. I assure he has kept the money in his pocket because it is already waive off. My father does not anything about the waive off. Can you advice me how we can get the money back. I will give you details if required.
Thanks
Initializing the step of waiving off hefty Rs.60,000 crore farmer?s loan, Finance Minister P Chidambaram on Tuesday asked from the Lok Sabha members to approve the supplementary grant of Rs.10,000 crore as a part of loan write-off from the budget for this fiscal year 2007-2008.
Asking for this grant from the current fiscal, Finance Minister has revealed the government?s strategy of waiving off the robust loan without putting extreme burden over government as well as banks.
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The banks were not pleased with the FM?s decision of leaving heavy unpaid loans. Now, this step of finance minister would heal the banks? wound of leaving heavy unpaid loan because this granted money would be used to compensate the regional rural and cooperative banks.
After getting approved of the grants, finance ministry would now be able to allocate more money in the next fiscal?s budget that was announced on February 29, 2008. Though the amount of Rs.10,000 crore is the part of immense farmer?s loan and the granted amount can compensate the regional rural and cooperative banks, while the NPA of the urban and commercial banks are too big to repay.
Finance Minister has assured the remaining banks to compensate them too. For this, FM has sought to approve the gross additional expenditure of approximately Rs 1,40,379 crore from the Lok Sabha members in which cumulative net cash outgo is Rs 43,060 crore. The remaining Rs.97,318.16 crore would be extracted from the savings of the ministries and departments. Out of net cash outgo a large portion of it 87% (Rs. nearly Rs 37,479 crore) is non-Plan expenditure.
The revenue collection of this fiscal year has boosted due to high growth rate that has reduced the fiscal deficit for 2007-08 from estimated 3.3% to 3.1% while the revenue deficit was pegged at 1.4%. Government has set the target of 2.5% of fiscal deficit for the next fiscal 2008-09.
After exposing the budget on February 29, Reserve Bank of India has asked banks to provide the detailed NPA data, so that government can assess its liability. On the other hand, National Bank for Agriculture and Rural Development (NABARD) has instructed regional rural banks and cooperative banks to compile state-wise data on NPAs relating to farmers? loans and submit to finance ministry within a month.
FM has announced in tabled budget for 2008-09 to grant the Rs.60,000 crore debt relief to small and marginal farmers who have been declared as defaulters. The rule of waiving off the debt would be imposed on those, who had taken the loan before March 31, 2007 and were being declared defaulters till December 31, 2007. But, now FM has extended the time limit. Now, the farmers who have been declared defaulters by February 29, 2008 will also be benefited from this loan waiving policy. Rest of the farmers will not be entertained. Here, the term small and marginal farmers refer to those who have less then 2 hectares farmland.
No announcement has come from the government to those farmers who have paid their debts well before in time. However, a group of banks have suggested the governments to provide incentives as a reward for repaying the debts on the time period. This will motivate the farmers.
Chidambaram has also assured the big farmers to offer them one-time settlement scheme to completely eradicate the farmer?s loan after completing this loan-waiving scheme that is scheduled to complete till June 30, 2008. Government is also considering about to completely wiping out bad assets of non-farm sectors? credit as well. The government will also examine about the available credit for those farmers who depend upon non-far activities for their survivals.