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Andhra cabinet gives nod to farmers’ loan waiver

Following in the footsteps of the Telangana government, the Andhra Pradesh cabinet has also decided to waive Rs150,000 of crop and gold loans per farmers’ family in the state and Rs100,000 for each Dwcra, the women’s self-help group.

Chief Minister N Chandrababu Naidu, describing the decision as a “courageous move” after the cabinet meeting on Monday, said the burden on the state exchequer on account of the loan waiver scheme would be to the tune of Rs430 billion.

Even farmers who had repaid their loans will be eligible for a deposit of Rs150,000 into their accounts, he said, adding that the government decision was based on humanitarian grounds to help the distressed farmers in the state.

Stating that the government was still waiting for a response from the Reserve Bank of India on rescheduling of crop loans, Naidu said the cabinet had also decided to set up a committee to look into ways and means to raise funds for the purpose. “If the apex bank agrees to rescheduling of crop loans, the farmers can go in for a loan again for the kharif season, failing which the state would pay the banks,” he said.

“We have informed the RBI that the state government would repay the loan dues (to banks) in 6-7 years upon implementation of the loan waiver, but the central bank is yet to responded,” Naidu said.

“The committee will look into various sources of funds mobilisation. The state government intends to create a farmers’ welfare cess in revenue-generating departments to pool up resources. We will also mobilise income from mining activities and create an escrow account for securitisation of funds,” Naidu said, adding that another fund raising avenue that the government was looking at was the disposal of massive stocks of seized red sanders, which has huge demand in the global market.

Earlier, an expert committee headed by Nabard ex-Chairman P Kotaiah to look into the loan waiver issue submitted its report to the chief minister on Monday recommending a limit of Rs100,000 per family but the cabinet decided to enhance the cap to Rs150,000.

The announcement comes as a major relief to farmers in the neighbouring state as there was speculation that the farm loan waiver scheme, announced with much gusto during the general election campaign, would be watered down.

The cash-starved Andhra Pradesh government which started with a negative balance of Rs150 billion post bifurcation of united Andhra Pradesh, was considering various measures to minimize the impact of the loan waiver scheme on the state economy. — news@khaleejtimes.com