HYDERABAD: Chief Minister Y. S. Rajasekhara Reddy on Saturday addressed a letter to the Prime Minister, seeking waiver of interest that accrued on farm loans as on March 31, 2004, too.

He urged Manmohan Singh to bring these old loans too under the Rs. 9,600-crore special package announced by the Centre recently for 16 districts in the State that reported suicides by farmers. The package had allowed waiver of interest (nearly Rs. 1,400 crores) accumulated on the loans till January 30, 2006, but excluding old loans.

If the Prime Minister concedes the plea, farmers will stand to benefit to the tune of Rs. 1,662 crores, the accumulated interest over the old loans as on March 31, 2004. The earlier Comprehensive Debt Relief Package (CDRP) announced by the Centre to help the farmers affected by natural calamities had merely deferred by two years, the payment of loans and interest, as on March 31, 2004.

The burden on farmers on account of the old loans, in fact, was heavier but the waiver was denied on these loans on technical grounds. Dr. Reddy said the NABARD had clarified that interest would be counted on the old loans for the postponed period.

The Chief Minister said technical reasons should not come in the way of providing the much-needed relief to farmers. Speaking to reporters, he said the latest package would not help farmers unless the old loans were also covered. The service sector should be taken to the rural areas to supplement incomes of farmers' families. In China, this was done 20 years ago, leading to the present happy situation there.

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