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Chidambaram: will do only what is doable

Special Correspondent

NEW DELHI: Promising to consider all suggestions on the farm loan waiver scheme with an open mind, Finance Minister P. Chidambaram on Friday said the government could, however, accept only what was “doable and affordable.”Responding to supplementaries during question hour in the Lok Sabha, he said all suggestions were being examined.

The members sought to know whether the government planned to increase the land holding ceiling from two to five hectares to benefit more farmers.

The Minister said the Reserve Bank of India and the National Bank for Agriculture and Rural Development were drafting guidelines for implementation of the scheme, the deadline for complete waiver being June 30. The guidelines would be issued shortly. While all public sector banks had been sensitised to the scheme, he would meet the managing directors and chairpersons of all banks in the first week of May.

The government had received suggestions for revising the land-holding criteria taking into account the irrigation status or productivity, doing away with the land-holding criteria, inclusion of those farmers who had taken loans from moneylenders and extending the scheme to those who had paid their loans in time. These were also under examination, he said.

Steps to check prices

In a statement to the House, Mr. Chidambaram said he was confident that the measures being taken by the government would result in moderation of prices.

“We have taken several financial measures and more administrative steps are being contemplated which should help in checking inflation. More steps will be taken, but it will take some time before the impact is visible. We have to be patient,” he said.

Mr. Chidambaram’s statement came on the day when inflation went up to 7.33 per cent from 7.14 per cent.

He said wheat production and procurement in 2007-08 was very good and “we have a positive report on monsoon that indicates a good kharif crop. It is reported that steel companies have agreed to the Prime Minister’s appeal to hold the price line for another 2 to 3 months.”

Blaming the behaviour of the market in some places on inflation, he said the traders in Delhi had political backing for opposing raids.

The anti-inflationary policies of the government included fiscal discipline, rationalisation of duties of essential items, and effective supply-demand management of essential commodities through liberal tariff.

“Supplementing the government’s efforts, the Reserve Bank’s monetary policy aims to support economic growth while containing inflationary expectations arising out of uncertainties in domestic and international environment. Though the measures to contain inflation may result in some moderation in economic growth, it is the endeavour of the government to sustain the current momentum of high growth with price stability.”

“Inflation is largely driven by international market and more measures will be put in place in due course,” he said.

On futures trading, Mr. Chidambaram said this had been banned for wheat and rice earlier. “We will shortly take a decision on banning futures trading in other essential commodities if the Abhijit Sen Committee fails to give its report on the deadline fixed for it.”

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