New Delhi, Feb 29 : To give a boost to the agricultural sector, Union Finance Minister P. Chidambaram today announced a loan waiver for about forty million farmers while presenting his Budget proposals for fiscal 2008-09. This relief is expected to help the government deal with its current agrarian crisis.
Chidambaram announced waiver of 500 billion rupees worth of loans granted to small and marginal farmers and a settlement scheme of 100 billion rupees for other farmers.
The Finance Minister announced Debt Waiver and Debt Relief scheme under which all agricultural loans distributed by scheduled commercial banks, regional rural banks and cooperative credit institutions upto March 31, 2007 and overdue as on December 31, 2007 will be covered.
Agricultural loans, which were rescheduled and are restructured during 2004-06 as per the Reserve Bank of India (RBI) guidelines will also be eligible for a waiver or an one time settlement (OTS) on the same pattern.
Chidambaram said that the scheme would be completed by June 30 this year.
Thirty million crore small and marginal farmers and ten million other farmers will benefit from the scheme.
Chidambaram has also announced reduction in excise duty on agriculture related items and in order to reduce the cost of manufacture of cattle and poultry feeds, duty on vitamin premixes and mineral mixtures has been reduced from 30 per cent to 20 per cent,
In an attempt to support domestic fertilizer production, he reduced the customs duty on crude and unrefined sulphur from five per cent to two per cent.
Chidambaram's announcements assume significance as the number of farmers committing suicide has gone up in recent years. However, it remains to be seen that what benefits would be reaped by those farmers who have taken loan from private money lenders.
It may be recalled that a 37.5 billion rupees relief package announced by Prime Minister Manmohan Singh during his July visit to Vidharbha region of Maharashtra was unable to contain the grave situation of farm suicides.
Over 2000 farmers committed suicides as per official Maharashtra Government reports, which is highest in the history of agrarian crisis.
According to the National Crime Records Bureau (NCRB) data, Maharashtra is head of all others in the farmers' suicide cases. In last one-year, the rise in farmer suicides in Maharashtra is four and a half times higher than Andhra Pradesh.
The latest data from the NCRB show that Maharashtra recorded 4,453 farmer suicides, higher than any other state.
Tata Institute of Social Sciences' figures have suggested that around 150,000 farmers had committed suicide over the past 10 years as they could not repay debt owed to money-lenders.