Raje govt looks for loans to fund loan-waiver plan
RAJASTHAN GOVT HAD PROMISED TO BEAR A BURDEN OF ₹8,000 CR BY WAIVING LOANS OF 20 LAKH FARMERS
JAIPUR: Three months after it announced that it would waive farmers’ loans, the Rajasthan government is itself knocking on the doors of banks and seeking loans to fund its promise.
Presenting the state budget on February 18, chief minister Vasundhara Raje had announced a one-time crop loan wavier of up to ₹50,000 for small and marginal farmers. The waiver, she announced, would be applicable to overdue and outstanding category of short term loans. Her government promised to bear a burden of ₹8,000 crore giving benefit to nearly 20 lakh farmers.
Three months down the line, and few months before the state goes to polls, the BJP government is yet to arrange for the money to fulfil the promise. Raje had announced a provision of ₹2,000 crore in the 2018-19 budget for the waiver. The government is now engaged in arranging the remaining ₹6,000 crore.
Cooperatives minister Ajay Singh Kilak has held meetings with department and bank officials to work out modalities to arrange the funds. The government has already announced that camps will be organized to disburse loan waiver certificates to eligible farmers.
Cooperative bank officials, meanwhile, approached different banks but have not got a positive reply. National Bank for Agriculture and Rural Development (NABARD ), the apex Rural credit development bank in India, too has refused to give credit to the Rajasthan government for loan waiver.
Officer in-charge, NABARD Rajasthan, RK Thanvi said as per the bank guidelines, it cannot offer credit for farm loan waivers. “We offer refinance to apex banks for fresh loans that are given to farmers at the start of the Rabi and Kharif seasons ,” he said.
Minister Kilak, however, claimed credit would not pose a problem. “We will get ₹5,000 crore from banks. We will get 60% funds from refinance that the apex banks get from Nabard and 40% from cooperative banks. The government will give bank guarantee,” he said. However the government has not given it in writing to the apex bank that it will give guarantee. Nabard will provide 40% credit at 4.5% interest while the remaining 20% will be given at an interest rate of 8.5%.
Though a budget provision of ₹2,000 crore has been made, Kilak said with interest amount, the final figure would be around ₹2,500 crore. He said the government would get some funds from National Cooperative Development Corporation which provides agriculture credit. “We have approached NCDC officials and they have said that the funds will be made available within 8-10 days,” he said.
He said some funds would flow from recovery of loans from farmers “Only loans up to ₹50,000 have been waived. Farmers who have loans of higher amounts need to repay those.”
Kilak said in the first phase, camps will be organized on May 26 and 27 at the Gramin Sewa Sehakari Samitis in all districts where incharge ministers will hand out loan waiver certificates to farmers. After that regular camps will be organized from June 1.