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Government orders conversion of short-term loans

By Our Special Correspondent

CHENNAI, FEB. 21. The Chief Minister, Jayalalithaa, has announced one more concession to farmers.

The State Government today ordered conversion of short-term loans to the tune of Rs. 250 crores availed by farmers in 2002-03 into medium-term loans. This will benefit nearly two lakh farmers in the State. However, this concession will not be applicable to farmers who have raised cash crops, according to an official release.

At present, farmers are eligible for short-term loans on clearing their earlier loans. But due to drought many farmers have not been able to repay the loans and have requested the Government to convert their short-term loans into medium-term to enable them raise loans for their next crops.

The Government sent a proposal to the National Bank for Agriculture and Rural Development (NABARD) which agreed for conversion but limited it to dry crops. As the Chief Minister felt that it would not benefit a majority of farmers, she wrote to the Prime Minister requesting him to extend the concession to all farmers.

Now, the NABARD permitted the conversion of short-term loans of farmers into medium-term for all crops, except cash crops. This will make farmers eligible to avail short-term loans for raising their next crop. The Government would release Rs. 20 crores as its share for the conversion.

The Chief Minister also waived penal interest and service charges for those who have obtained loan from primary cooperative housing societies as an incentive to repay their loans. If a member of a primary cooperative housing society repays the overdue principal and interest outstanding as on October 1, 2003, on or before April 30, the penal interest and service charges standing as on that date will be fully waived. The housing societies are also eligible for the concession if they repay their outstanding principal and interest as on October 1 last year before April 30 to the Tamil Nadu Housing Federation.

About seven lakh cooperative housing society members will benefit to the tune of Rs. 125 crores, the release said.

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