The Hindu : National : Revised package for long-term coop. credit

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Thursday, Oct 11, 2007
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Revised package for long-term coop. credit

Special Correspondent

NEW DELHI: The Centre will revise the Rs 4,850-crore package drawn up for reviving the long-term cooperative credit structure, as some States have expressed reservations about the current format. “I will draw up a revised package by the end of this month, incorporating as many suggestions of States as possible. I will send it to State governments by the first week of November and call a smaller number of States for intensive discussion,” Finance Minister P. Chidambaram said on Wednesday.

He was briefing newspersons after his meeting with representatives of State governments here.

Higher fund quantum

In the revival package, based on the Vaidyanathan Committee report, likely to be finalised by November-end, the fund quantum “is likely to go up a bit but not come down,” Mr. Chidambaram said. Without going into details, he said there was a broad consensus among the States on the recommendations although some had reservations about some parts of the report.

Throwing light on the differences, West Bengal Finance Minister Asim Dasgupta said that as the relative share of the Centre, the States and cooperatives was worked out at 74:11:15, the cooperatives would find it difficult to bear the financial burden.

Instead, he suggested, the long-term cooperative credit societies should be allowed to retain the State government’s equity up to 25 per cent of the total subscribed share capital and the amount in excess of 25 per cent converted into grant by the State concerned. The Centre, the States and the cooperatives should also bear losses in non-farm loans of cooperatives in the ratio 85:9:6, Dr. Dasgupta said.

Short-term credit

On the revival package of over Rs. 14,000 crore for the short-term cooperative credit structure, Mr. Chidambaram said the State governments which promulgated ordinances or introduced Bills on amending the State Cooperative Societies Acts for reforming the cooperative structure would get 25 per cent of the Centre’s share. Those States which conducted a special audit of credit societies would get 75 per cent of the Centre’s share.

“By and large, progress has been made in short-term credit. We hope the progress will quicken…This is our last chance to retrieve our cooperative institutions. They are in a shambles...We will revive them by putting short-term structure on platform and long-term structure too. I am determined to show progress,” he said.

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