'Govt to modify farm loan waiver to suit localites'

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New Delhi, Mar 17: Finance Minister P Chidmabaram today assured the nation that the Rs 60,000 crore loan waiver and relief scheme would be modified taking into acount the peculiar conditions of states to benefit the maximum number of distressed farmers.

''We will finalise the scheme in the light of suggestions made in this House, taking into account the peculiar conditions of different states,'' the Finance Minister told the Rajya Sabha while replying to a discussion on the Budget 2008-09. The scheme would be automatically applicable, leaving no scope for officials to introduce any discriminations, he added. The House returned the Appropriation Bill to the Lok Sabha after the Finance Minister's hour-long reply.

Replying to criticism that there was no provision in the Budget for Rs 60,000 crore for the loan waiver, Mr Chidambaram emphatically asserted that the scheme would be funded entirely through budgetary provisions as the government was quite comfortable on the revenue front. He said Rs 10,000 crore had already been provided in the current budget ending on March 31, adding that by the time the present Government's term ended in 2009, Rs 40,000 crore would have already been made.

The Finance Minister asserted that the mix of monetary and fiscal measures devised in the budget would keep inflation in manageable limit and assured that all steps would be taken to ensure the country's food sufficiency.

He expressed confidence that the present rate of growth at 8.7 per cent would be sustained.

The Finance Minister said the UPA Government had inherited a very difficult economic situation from the previous government. It reduced the revenue deficit from three per cent in 2004 to 1.1 per cent and the fiscal deficit from 4.5 to 3.1 per cent.

''I am disappointed that the Members did not grasp the significance of the fall in revenue defict.'' Explaining, he said the Government was facing a scenario in which the food and commodity prices were rising the world over.

The price of crude oil had gone up from Rs 35 US dollars per barrel in 2004 to Rs 111 dollars today, and similarly palm oil price went up from Rs 271 per mt tonne to Rs 1277 per mt tonne, he pointed out, adding that the cost of minerals and other items had also gone up sharply since the days of the previous Government.

So in such a situation, the Government faced the main challenge of containing the inflation while increasing growth, which he said was a must for increasing equity.

Refuting the opposition charges that the government was not doing enough to help farmers, Mr Chidambaram pointed out that during the NDA rule for six years, the Minimum Support Price of Paddy increased by only Rs 110 per quintal to Rs 550 per quintal and that of wheat by just Rs 80 to Rs 630 per quintal. The MSP of paddy now was Rs 745 per quintal and that of wheat Rs 1,000 per quintal.

The government would consider raising the MSP of paddy to Rs 1000 too as was being demanded, he added.

The Finance Minister said the off-take from Public Distribution System went up substantially during the tenure of the UPA government.

Mr Chidambaram, however, expressed concern at the nearly 36 per cent leakage under the PDS for which he held the State governments responsible.

He said the Government might have to give more subsidy to food and keep the PDS scheme going so that poor people were not affected.

The Minister flatly rejected the BJP's charge of indulging in communal budgeting, saying there was nothing wrong in providing more for the marginalised sections of society who had been left behind in the developmental race.

He also defended the National Rural Employmenmt Guarantee Scheme, saying that though there might be some problems in some parts of the country in its implementation, it had benefited people by and large.

''You cannot not throw away the baby with the bath water,'' he quipped.

The Finance Minister said the budget had also taken care of the needs in the social sectors like, education and health.

''I urge all to support the budget,'' he said winding up his reply.


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