FM hikes farmer debt relief to Rs 71,680 cr

He said all short-term crop loans of farmers with less than 5 acres taken by March 31, 2007, overdue as on December 31, 2007, and not paid till March 31, 2008, will be completely waived off. Chidambaram added that the government had also decided to incorporate the 8216;legitimate8217; demands for relaxing landholding norms in dry and un-irrigated areas, where landholding tends to be more than 5 acres.

Under the Budget announcement, farmers with more than 5 acres would be covered under a One Time Settlement OTS scheme where the government will waive of only 25 per cent of their short-term crop loans in lieu of farmers8217; paying the remaining amount. 8220;It was brought to our notice that in dry and un-irrigated areas, a large proportion of farmers will not get adequate relief under the scheme. The government thought it as a legitimate demand,8221; said Chidambaram.

Since a substantial proportion of farmers in dry areas will not come under the 5 acre ceiling for complete waiver and instead be covered under the OTS, the finance minister said that the approved guidelines has modified the OTS scheme for the identified dry districts. The loan waiver ceiling has been modified for these districts. 8220;In the identified 237 districts, which were either part of Drought Prone Area Development Programme DPAP, Dessert Development Programme DDP or Vidharbha Package, OTS relief will account for 25 per cent of the overdue amount or Rs 20,000, whichever in higher,8221; Chidambaram said.

Justifying the revised OTS norms as against relaxing the land holding norms in these districts, the minister said estimates suggest that about 60 to 65 per cent of farmers with landholding of over 5 acre will benefit from it. Chidambaram said the loan waiver would be implemented in a 8216;simple manner8217; where all bank branches have been asked to put lists of all eligible farmers on their notice board by June 30. There will be two lists 8212; one for small and marginal farmers and the other for other farmers under OTS.

8220;All that farmers whose names appear in those lists will have to just go and ask for a certificate about the loan waiver or loan relief from the respective banks without any application,8221; said Chidambaram. He said the government had decided to constitute a high-level monitoring committee headed by financial services secretary along with agriculture secretary. The committee will include the RBI deputy governor, the NABARD Chairman, and two heads each from public sector banks, regional banks, and state cooperative banks.

There will be a designated senior level officer in each state to address grievances in the implementation of the scheme.