The Hindu : Andhra Pradesh News : Private moneylenders put on leash

Online edition of India's National Newspaper
Thursday, Aug 05, 2004

Andhra Pradesh

Andhra Pradesh

Private moneylenders put on leash

By Our Special Correspondent

HYDERABAD, AUG. 4. Accepting the recommendations made by the Cabinet Sub-Committee on farmers' problems, the State Government has decided to restrict the interest charged by private moneylenders to 12 per cent and 5 per cent in the case of cooperative banks, Government institutions and commercial banks.

Briefing reporters after a Cabinet meeting, the Information and Public Relations Minister, Mohd. Ali Shabbir, said legislation restricting the interest would be introduced. With regard to cooperatives, Government institutions and banks, correspondence would be taken up with the agencies concerned, including the RBI and APCOB.

The Cabinet expressed concern over the "harsh methods" adopted by the banks for recovery of loans and wanted steps to prevent this trend. The view held was that the interest amount should not exceed the principal under any circumstances, the Minister said.

Credit needs

The Cabinet resolved that 70 per cent of the credit needs of the farm sector should be met by the banking sector with the facility to the tenant to get loan up to Rs 50,000 without gaurantee. The Centre would be asked to raise the credit ceiling to the sector to 40 per cent from the present 18 per cent.

Agriculture Commission

For the first time in the country, an Agriculture Technology Commission would be set up in the State headed by the Chief Minister to take up all farmer-related problems.

This would be in addition to the Agriculture Commission which would be formed with all-India level experts in the field, he said.

As for the other recommendations which were released by the Minister, a committee would be formed at village/mandal/constituency level for educating the farmers on the package of benefits offered to them under the new dispensation and motivating them against taking extreme steps such as suicides.

Major decisions

Mr. Shabbir said, a decision was taken to abolish the non-agriculture land assessment tax and introduce in its place a one-time payment through an Assembly legislation for conversion of agriculture lands into non-agriculture and other uses.

By another resolution, the Government decided to recruit Vidya volunteers as an emergency measure to meet the shortage of teachers following non-clearance of the case by the Supreme Court relating to transfers.

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