New Delhi, Mar 27 (UNI) The Cabinet today approved the setting up of a Farmers' Debt Relief Fund in the next four days with an initial corpus of Rs 10,000 crore and the schedule for release of funds for the Rs 60,314 crore Budget package for waiving farm loans.
According to the approval, banks and other financial institutions that would write off the loans, which would be completed by June 30 this year, would be given Rs 10,000 crore within this month, Rs 15,000 crore each in 2008-09 and 2009-10, Rs 12,000 crore in 2010-11 and Rs 8,314 crore in 2011-12.
The release of funds would provide liquidity to these banks despite the huge loan waiver scheme.
The Fund would be created by transferring Rs 10,000 crore from the Consolidated Fund of India to Public Accounts.
The liquidity mechanism had been announced by Finance Minister P Chidambaram in his reply to the Budget debate in Parliament after which the two Houses had approved the vote on account for meeting government expenses during April-July, pending the passage of the Budget in the post-recess session.
Mr Chidambaram had announced that the debt-ridden farmers would be entitled to fresh loans after the write-off.
The Finance Minister has promised to enlarge the scope of the scheme to benefit more farmers. This is expected at the time of the passage of the Budget. Mr Rahul Gandhi, MP and AICC General Secretary, has, while participating in the Budget debate in the Lok Sabha, sought the raising of the ceiling of two acres for the total write-off.
UNI SN VD DS1420