The Hindu : Front Page : `Debt relief' for farmers

Online edition of India's National Newspaper
Saturday, Jun 19, 2004

Front Page

Front Page

`Debt relief' for farmers

By Our Special Correspondent

NEW DELHI, JUNE 18 . The Centre today announced a major "debt relief" package for farmers.The proposals include raising farm credit by 30 per cent this fiscal, making 50 lakh new farmers borrow from banks and evolving a four-point strategy to restructure debt, including a one-time settlement of loans by defaulting farmers. Banks would also be permitted to advance loans to those under distress due to borrowing from non-institutional lenders (village moneylenders) — based on local knowledge — against "appropriate collateral or group security." The package, which has been drawn up in consultation with the Agriculture and Food Ministry, comes at a time when nearly 300 farmers in debt had committed suicide this year in Andhra Pradesh alone.

Making the announcement, the Finance Minister, P. Chidambaram, said: "This is the first step for redeeming our promise in the Common Minimum Programme (CMP) to double the flow of agriculture credit in three years. We will work closely with commercial banks, NABARD and the Reserve Bank of India on the implementation of the package. The chiefs of NABARD and the Indian Banks Association will convene a meeting of heads of commercial banks on June 22 followed by similar meetings for state cooperative band RRBs (Regional Rural Banks) on June 23 and 24 to discuss ways and means of implementing the policy."

Central to the package is the promise of a total flow of credit from all lending institutions of Rs. 105,000 crores in 2004-05 (It was Rs. 80,000 crores in 2003-04).

Action plans prepared by the lending institutions put the break-up of the lending at Rs. 57,000 crores by commercial banks, Rs. 8,500 crores by RRBs and Rs. 39,000 crores by cooperatives.

More Kisan Credit Cards

The package calls for enhancing disbursal of the Kisan Credit Cards (KCC), as those with cards availed of some kind of institutional credit. Till March 31, 2004, 4.14 crore KCCs had been issued. To increase credit flow, outlets of scheduled commercial banks and RRBs would be energised.

Under a Special Agricultural Credit Plan, commercial banks would make an effort to include at least 100 new farmers at each rural and semi-rural branch during the current year, enlarging the coverage by 50 lakh farmers.

Printer friendly page
Send this article to Friends by E-Mail

Front Page