Punjab seeks IT exemption on state credit coopertives

New Delhi, May 9 (UNI) Punjab government has sought income tax exemption on state credit cooperatives so that money saved could be used for the welfare of the farming community.

Punjab Cooperation Minister Captain Kanwaljit Singh, during a meeting with Union Finance Minister P Chidambaram here yesterday, also pitched for a special package of Rs 544.15 crore for credit cooperatives in the state which, he said, are providing crop loan at 7 per cent.

Declining the tax-exemption, Mr Chidambaram, however, promised to look into the possibility of using the income tax for the benefit of the same cooperatives.

On problems being faced by the credit cooperatives relating to release of re-finance by the NABARD for short-term and long-term loans, the Finance Minister said the rural banking body has been allowed to raise tax-free bonds for the purpose.

The Punjab Minister also asked for increasing the short-term refinance from 40 per cent to 70 per cent and lowering rate of interest on refinance.

Mr Chidambaram assured the Cooperation Minister to provide short-term refinance which has been denied so far by NABARD due to re-organisation of banks as a consequence of creation of new districts. The Finance Minister said 2 per cent interest subsidy to credit cooperatives for providing crop loan at 7 per cent will also be released.

UNI