New Delhi, Mar 27: The Union Cabinet today gave its approval for creation of a Farmers' Debt Relief Fund with an initial corpus of Rs. 100 billion to be transferred from the Consolidated Fund of India to Public Accounts during the financial year 2007-08. It also gave its approval for augmentation of the Fund required for reimbursing the lending institutions the amount of debt waiver or relief granted by them are as follows - Rs. 100 billion, Rs. 150 million, Rs. 150 million, Rs. 120 million, Rs. 83.14 billion. A scheme of debt waiver or relief has been announced in the Budget Speech 2008-09.
The implementation of said scheme will mitigate the hardships being faced by the farmers in general and small and marginal farmers in particular. Upon being granted debt waiver or signing an agreement for debt relief under the One Time Settlement (OTS), the farmer would be entitled to fresh agricultural loans from the banks in accordance with normal rules. The implementation of the debt waiver and debt relief scheme will be completed by June 30, 2008.