New Delhi, Feb 29 (UNI) Finance Minister P Chidambaram today said the government would provide liquidity to banks over three years for waiving off farm loans totalling Rs 60,000 crore, but refused to disclose how this would be done.
''By and by we will tell you how this liquidity will be provided...I have some intelligence on how to provide this,'' Mr Chidambaram told reporters who wanted to know the details of the proposed mechanism.
Liquidity would be provided to the extent of the loan that would be written off by each bank. ''I am requesting you to assume that I would have done some homework. We have taken everyone on board'' before including the financial package for the farm sector in the Budget.
Asked whether it was fiscally prudent to take such a measure, the Minister told the customary post-Budget press conference that Prime Minister Manmohan Singh and his government wanted to stand up and be counted as being pro-farmer, not anti-farmer. ''I am not ducking the issue.'' Responding to the CPI(M)'s lament that the government had failed to address the distress of farmers who had taken loans from private money lenders, he said there was no way to identify such persons and quantify the loans. Every party had sought relief only for farmers indebted to institutions and that ''is what we have addressed,'' he reasoned.
The government had helped the banks to clean up their balance sheets by writing off the loans. Otherwise, the non-performing assets of the banks have gone up and the banks would have faced a cash cruch and would not be in a position to lend fresh loans, he explained.
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