Debt waiver plan in motion, govt to raise ₹5,500 crore
3,500 agricultural cooperative societies asked to verify names of farmers
CHANDIGARH: The process to waive off farmers’ debt has started in the state with the government close to arranging ₹5,500 crore, a major portion of the total waiver plan of at least ₹9,500 crore. Sources in the government said the waiver could take place within six weeks. Initially, the government would settle farmers’ debt with the state cooperative establishment.
To facilitate this, all 3,500 agricultural cooperative societies have been asked to prepare and verify names of farmers, who fall within the ambit of the notified debt-waiver policy.
As part of honouring its prepoll promise, Punjab chief minister Captain Amarinder Singh, in June, made a statement in the Vidhan Sabha of waiving off up to ₹2 lakh debt (crop loan) on small and marginal farmers, touching a total of 10.25 lakh people. However, the government, facing acute financial crunch, has had to work hard to arrange the money.
On October 16, the state council of ministers decided to amend the Rural Development Act, paving the way for using the rural development fund for debt waiver. The Rural Development Board, which manages funds collected from sale of crops in the state, is in the process of passing resolutions to pledge its income for 5-7 years.
This will help the government raise loans to the tune of ₹5,500 crore from banks and financial institutions.
The CM is the ex-officio chairman of the Rural Development Board. The government collects 3% rural development cess on sale of crops.
“Banks are awaiting sovereign guarantee from the state to clear the loan, which is expected any day,” said a source in the government.
The state government resorted to using the rural development fund, as it failed to get an assurance from the Centre on getting its borrowing limit increased from existing ₹12,819 crore.
“The government will soon arrange the remaining ₹4,000-4,500 crore to finish paying the promised debt,” a government officer said.