Money needed for loan waiver, fertliser subsidy: Chidambaram

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New Delhi, Oct 21 (UNI) Making a hardsell of the government's supplementary demand for grants in the Lok Sabha, Finance Minister P Chidambaram pointed to the government's loan waiver scheme, huge increased subsidy on fertilisers due to inflated world crude prices and the recent financial crisis convulsing the globe to drive home the issue.

Replying to pointers against the 'demand', Mr Chidambaram challenged the House against any dissenting voice over the government's loan waiver scheme or its move to pad subsidies on fertilisers.

''Of Rs 105,613 crore sought, Rs 38,863 crore had been given by way of cash on fertiliser subsidy alone and Rs 66,000 crore worth loans of 3.6 crore farmers waived.'' ''Since we cannot increase fertiliser price and several poor farmers had to be relieved of their debts, the government has had to seek additional grant,'' he told the House.

''Moreover, due to present financial crisis gripping the world we are facing a ripple effect which has led to higher inflation, stunned growth and financial instability and we need the support from all quarters,'' he said.

''Our financial and banking system is very strong and we have achieved the Rs 2,800 crore new loan lending target for farmers in the August-September kharif season.'' Replying to doubts over inflation control measures, the FM said inflation was well under control in the last four years of UPA rule, and it is only in the 5th year that things had gone beyond tolerable limits.

This was due to spiralling global crude prices which had led to a rise in prices of essential commodities, he told the House.

To a pointer on financial health of the country, Mr Chidambaram said, ''the first thing we did after coming to power was to abandon the NDA's policy of diluting government stake in PSUs to 33 per cent.'' Stressing that his government was committed to not going beyond a 49 per cent stake for private participation in PSUs, the FM said this was one of the primary reasons why we had been able to absorb the ripple effect of the global meltdown.

''Our financial and banking system was stable and only steps to stimulate it were needed, even as moves to control inflation was being taken.'' Dishing out statistical figures, the FM also dismissed accusations of slow industrial development during UPA rule, saying while the highest industrial growth recorded during NDA rule was seven per cent, it had touched to nearly 12 (11.6) per cent under the present dispensation.

On reduction in the prices of petroleum products, Mr Chidambaram said a drop in international prices has not come to the level where price reduction could be effected.

''When crude prices reach 67 dollars, then we would break even.

Only when it falls below that the government would take appropriate measures.'' The demands were later passed by the House.

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