Scheme to get farmers rid of money lenders; larger debt waiver

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New Delhi, Mar 14 (UNI) Taking the sting out of the criticism of the Opposition, Finance Minister P Chidambaram today said the government will soon come out with a comprehensive scheme enabling the farmers to get rid of the debt burden from money lenders by borrowing from banks, hinted at enlarging the Rs 60,000 debt waiver to the farming community and gave details of financing of this mammoth scheme.

Replying to the debate on the General Budget 2008-09 in the Lok Sabha, Mr Chidambaram said that two-thirds of the funding of the debt waiver scheme would take place within the first 14 months of its operation and the resources would be found from within the budgetary provisions while meeting the stiff targets relating to fiscal deficit and revenue deficit as mandated by the FRBM Act.

In his nearly one-hour reply, Mr Chidambaram dwelt at length that he would be able to garner the resources as result of tax buoyancy.

If this was not sufficent, the government would take recourse to non-tax revenues, followed by non debt-capital receipts and lastly by additional borrowings.

The Finance Minister was at pains to explain that borrowings from the market would only be the last resort adding that he had already provided for Rs 10,000 crore in third supplementaries, which he desribed as year zero.

The entire amount would be cleared in three agricultural years or four financial years.

The institutions to be covered under the debt waiver would be Cooperative Banks, Regional Rural Banks and Scheduled Commercial Banks. This would be 55 per cent, 10 per cent and 35 per cent respectively.

The debt waiver would cover 3 crore small and marginal farmers and one crore others.

Eighty-four per cent of the total beneficiaries would be small and marginal farmers, he said.

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