Date:06/03/2008 URL: http://www.thehindu.com/2008/03/06/stories/2008030650310200.htm

Tamil Nadu - Tuticorin

“Farm loan waiver will have impact on reforms”

Staff Reporter

Discussion on Union Budget 2008

— Photo: N. Rajesh

Money matters: R. Sriram, Member, Institute of Chartered Accountants of India, addressing a meeting at V.O.C. College in Tuticorin on Wednesday.

Tuticorin: The V.O.C. College conducted an interactive session on ‘Union Budget-2008’ here on Wednesday, to discuss the effects of budget in daily life.

Answering queries of students, R. Sriram, member, Institute of Chartered Accountants of India, said that the Finance Minister had neglected infrastructure, general industrial growth and housing sector in the budget, though he had reduced CENVAT rate from 16 per cent to 14 per cent to give a stimulus to manufacturing sector.

According to him, debt waiver scheme announced for small and marginal farmers would have a cascading effect on reform process in the long run.

“The waiver to the tune of Rs.60,000 crore looks to be a sop formulated at the eleventh hour with an eye on forthcoming general elections, since there was no budgetary allocation made to provide liquidity to banks for an amount equal to the waiver,” he said.

He said that the scheme would cover all loans disbursed by commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and over due as on December 31, 2007.

Quoting the economic survey, he explained the GDP (gross domestic product) growth rate projections and food grains production for the fiscal ending on March 31.

S. Balakrishnan, head, Department of Economics, was present.