The Hindu : Interest on kharif loans waived in drought-hit States

Online edition of India's National Newspaper
Thursday, Dec 19, 2002

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Interest on kharif loans waived in drought-hit States

By Gargi Parsai

New Delhi Dec. 18. To mitigate the sufferings of farmers in 14 drought-hit States, the Prime Minister, Atal Behari Vajpayee, today announced in Parliament a complete waiver of interest on loans taken by them for the damaged-failed kharif cultivation this year, as a one-time measure. (As per the recommendation of the Commission for Agricultural Costs and Prices, this is likely to cost the exchequer Rs. 2,000 crores).

In a suo motu statement in both the Houses, Mr. Vajpayee said the Government had earlier deferred the current year's interest on both the kharif crop loan and agricultural term loans, and rescheduled the payment of principal into term loans. These were to be recovered over the next five years from small and marginal farmers and in three years from other farmers. The interest for one year, on both these categories of loans, amounting to Rs. 6,040 crores, was deferred and staggered for recovery over several years. "I have now decided to waive completely the first year's deferred liability of interest on kharif loans, as a one-time measure,'' he said.

The farmers who had obtained kharif loans would now be entitled to an endorsement of this waiver directly from their loaning bank. Appropriate guidelines in this regard would be issued by the Reserve Bank of India.

Keeping in view the severity of the drought, he had decided to extend the agricultural input subsidy to cover all categories of farmers, for sown and unsown areas up to a ceiling of two hectares. Earlier, this subsidy was announced only for small and marginal farmers at an estimated cost of Rs. 1,490 crores to the Government.

Mr. Vajpayee said that on the basis of assessments to be made by the Ministry of Agriculture, in consultation with the Finance Ministry, all the affected States would receive additional amounts for input subsidy, based on actual land holdings and cultivation patterns. This decision would cost the Government an additional amount of Rs. 555 crores to be met either from the Calamity Relief Fund or the National Calamity Contingency Fund.

Stating that the Centre had sanctioned an allotment of 38.75 lakh metric tonnes of rice and wheat worth over Rs. 4,000 crores free of cost to the 14 States, Mr. Vajpayee said more foodgrains would be made available to the needy States depending on the utilisation and functioning of the PDS. An additional amount of Rs. 25 crores was being sanctioned to support such ``gaushalas'' that tend to more than 1,000 cattle. Funds would be made available directly to the NGOs running such `gaushalas'.

A committee comprising officers from the Department of Animal Husbandry, the Ministry of Finance and the PMO would authorise such release.

The Prime Minister said the Ministry of Railways would run additional water tanker trains to Rajasthan. The Water Resources Ministry would appoint a task force to assist the affected States, while the Petroleum Ministry would examine the possibility of deep drilling rigs being employed for sinking deep tube-wells.

In the Lok Sabha, the Kerala MPs protested at their State not being considered drought-hit. They wanted the measures to be extended to the State.

The Centre has already released Rs. 2,000 crores for drought relief from the CRF and the NCCF to the drought-hit States, in addition to Rs.700 crores as additional assistance to severely affected States.

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