'UPA must implement interest reduction scheme'

Bangalore, May 25: Former Prime Minister H D Deve Gowda today urged the UPA Government at the Centre to immediately implement the provision of loan at seven per cent to the farmers through commercial and cooperative banks in the country.

In separate letters to Prime Minister Manmohan Singh and Union Finance Minister P Chidambaram, released to the media here, he said the ''half hearted measures'' of the Union Government had not been implemented yet. Neither the Reserve Bank of India (RBI) nor the National Bank for Agriculture and Rural Development (NABARD) had given any guideline or direction to the lending institutions on this issue, he noted.

Mr Gowda requested Mr Chidambaram to take immediate action as the farmers were eager to take up kharif operations with the monsoon setting in and were in urgent need of financial assistance ''at this critical hour''.

''It is learnt that the banks are not coming forward to extend loan facilities to the farmers as they had not received any guidelines/instructions from the authorities concerned,'' Mr Gowda said.

He told Dr Singh that though Mr Chidambaram had interacted with financial institutions in this regard, unless specific guidelines were issued by the Ministry of Finance, they would naturally hesitate to take the risk of implementing the pronouncements made by the Finance Minister in Parliament.

Referring to the four per cent interest rate promised by the Karnataka Government, Mr Gowda, in a letter to Chief Minister H D Kumaraswamy, sought him to convene a meeting of the cooperative bank officials, the State Finance Ministry and other banking officials within a week and take necessary steps to implement the scheme.

He said the Government should also repay the subsidy to cooperative institutions so that they could repay the amount to NABARD and be eligible for refinance. In the four page letter, he told Mr Kumaraswamy that the state interest subsidy dovetailed with the central scheme of seven per cent loan could not take off unless the Centre takes necessary steps. Otherwise, the state mayto build up reserve funds to help the farmers, he added.

UNI