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Wednesday, September 30, 2020

Gujarat considers outsourcing task to recover loans from the underprivileged

A senior government official said that while the SJED was providing funds to be given to the needy persons through the corporations in the form of loans, the recovery rate of the loan amount was hardly 40-50 per cent.

Written by Parimal A Dabhi | Gandhinagar | August 28, 2020 1:59:06 am
post matric scholarship scam, ghost institutions, Chandigarh news, Punjab news, Indian express newsThe report of this probe, submitted by Jaspal Singh to Chief Secretary said that money trail of Rs. 39 crore was traced. (Representational)

The Gujarat government is considering whether to outsource the task to recover loans given to people from various underprivileged sections of the society through nine corporations of the Social Justice and Empowerment department (SJED), top sources in the government have said.

There are nine development corporations under the SJED for the development of various underprivileged sections of the society such as sanitation workers, Thakor & Koli communities, minority communities, Scheduled Castes, nomadic & denotified tribes, herdsmen, economically backward non-reserved communities and other backward communities. The government has been providing loans to the members of the underprivileged sections for various purposes such as higher education, vocation, livelihood, etc.

A senior government official said that while the SJED was providing funds to be given to the needy persons through the corporations in the form of loans, the recovery rate of the loan amount was hardly 40-50 per cent.

“One of the major reasons for less recovery is the staff crunch in our department and different corporations that provide the loans… it is difficult to follow the lengthy recovery process,” the official said.

“The process includes various stages… First, the loan defaulter has to be given intimation… Then, a notice has to be given to the loan guarantor. If the payment is still not done, then the post-dated cheque taken from the loanee has to be used to recover the payment. And if the cheque is dishonoured in the bank, then coercive action has to be initiated under the provisions of the Negotiable Instrument Act,” the official added.

“We don’t have enough staff to follow the lengthy process and so we are in the process of outsourcing the recovery process to a private group. The tender for the same is almost ready and will be floated after the final decision,” the officer said, adding that the government is planning to increase the current recovery percentage from 40-50 per cent to above 90 per cent with 5 per cent of the recovered amount to be paid to the recovery group as remuneration.

Social Justice & Empowerment minister Ishvar Parmar said that a proposal to outsource the recovery process to private entity was under consideration. “For outsourcing , we have to take permission of the finance department. Final discussion (on the proposal) is yet to be done,” he said.

“If there is a staff deficit, then (it) has to be done,” Parmar added, saying that he did not have the latest information on the proposal.

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