The Hindu : National : Supplementary grants include Rs. 10,000 crore for waiver

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Supplementary grants include Rs. 10,000 crore for waiver

Special Correspondent

Rs. 10,000 crore is for setting up debt relief fund
Authorisation sought for additional expenditure of Rs. 1,40,378.91 crore

NEW DELHI: The government on Wednesday initiated the first step towards providing for the Rs. 60,000-crore farm loan waiver scheme, setting apart Rs.10,000 crore from the supplementary demands for grants for setting up a debt relief fund for farmers.

The relief fund, based on a non-Plan allocation, was included as part of the third and final batch of supplementary demands for grants for 2007-08, tabled by Finance Minister P. Chidambaram in the Lok Sabha to seek authorisation of a gross additional expenditure of Rs.1,40,378.91 crore. Of this, the expenditure proposals under various heads involve a net cash outgo of Rs. 43,059.92 crore, while the gross additional expenditure, matched by savings of ministries and departments, add up to Rs, 97,318.16 crore.

Even as the provisioning of Rs. 10,000 crore for the farmers’ debt relief fund is the first pointer to how the government proposes to find resources for the loan waiver scheme, the picture is expected to become clearer when Mr. Chidambaram replies to the debate on the budget for 2008-09.

The government has already committed itself to implementing the loan waiver scheme by June-end. The debts of small and marginal farmers will be completely waived, while the loans of other farmers will be waived up to 25 per cent as a one-time settlement on repayment of 75 per cent of the debts.

The supplementary demands for grants reveal that the Rs. 10,000-crore fund will be utilised for implementing the debt relief scheme to cover all agricultural loans disbursed by commercial banks, regional rural banks and cooperative credit institutions up to March 2007 and overdues as of the year-end and not paid till February 29, 2008.

Alongside, Rs. 9,296.92 crore has been allocated for providing compensation for the issue of bonds to oil marketing companies as per the estimated under-recoveries on account of sale of subsidised petroleum products.

Mr. Chidambaram also sought Parliament’s approval for spending an additional Rs. 5,823.90 crore by way of subsidy to the Food Corporation of India and Rs. 3,586.70 crore for the subsidy component on imported fertilizers.

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