Chandrababu Naidu Government waives Rs.1.5 lakh loans to farmers
July 21, 2014 - Hyderabad
The Andhra Pradesh TDP led government on Monday putting down the shutters has put an end to the impasse over loan waiver, the chief slogan with which the TDP government came to power.
The Cabinet meeting held under the chairmanship of the Chief Minister Nara Chandrababu Naidu that lasted to nearly four hours has decided to waive loans to a maximum extend of Rs.1.5 lakhs to farm communities. The Kotaiah committee that was appointed by the Chief Minister has submitted its final report to the Chief Minister which the Cabinet has discussed in length.
The State Cabinet has decided to waive Rs.1.5 lakhs of loans to the farmers as against of Rs.1 lakh recommended by Kotaiah Committee. The Government has constituted a committee to frame guidelines and modalities for its implementation.
Chandrababu Naidu announced at a press conference said that ‘a loan a family’ will be waived with a cap of Rs.1.5 lakh. The loans of DWCRA groups will be waived up to Rs.1 lakhs. It is estimated that nearly 80 lakh farmers have availed loans and it costs the exchequer nearly Rs.30 to Rs.35 thousand crores and Rs.7,500 crore due to DWACRA and weavers’ loans. A burden of Rs.500 to Rs.600 crores will be on the government due to waiver of loans taken by SCs.
Kotaiah Committee recommends:
The Kotaiah Committee that has been appointed on the issue has suggested waiver of Rs.1 lakh up to a maximum basing on the deficit financial State position that comes to Rs.16,000 crore. It results to benefit to 87 per cent beneficiaries. Chandrababu Naidu said that the Cabinet has decided to go a step further and waived Rs.1.5 lakhs resulting in an increase of Rs.8,000 crore burden on the Government. The Committee recommended to make good the burden by raising from through securitization. It also recommended the guidelines to avoid misuse of the scheme. The committee also recommend to get funds through the sale of 15,000 metric tonnes of red sanders through open auction.
Of the crop loans taken by farmers, a maximum of Rs.1.5 lakhs will be waived for each family including gold loans taken for agricultural purposes. Of the loans availed by SHGs, Rs.1 lakh will be waived for each group. All crop and DWACR loan taken before March 3, 2014 are eligible for waiver. The scheme is applicable to farmers/DWCRA women who have repaid their debts as well as those who have not. In case tenant farmers and land owners both availed crop loans from the same farm land, priority will be given to tenant farmers.
The government has to bear Rs.30,000 crore to Rs.35,000 crore burden on crop loan waiver, Rs.7,500 crore on loans availed by women SHGs and Rs.500 crore on loans taken by weavers and SCs. A total of Rs.43,000 crore.