Loan waiver a 'death knell' for rural co-ops: RSS

Written by:
Subscribe to Oneindia News

New Delhi, Mar 16 (UNI) While the ruling Congress and other constituents of the United Progressive Alliance (UPA) have hailed the Rs 60,000 crore mega farm loan waiver in the budget, the RSS fears that it is a ''conspiracy'' to debilitate the cooperative sector which has given over 50 per cent of the loans.

The cooperative sector in the country accounts for Rs 35,000 crore farm loans and the cooperatives subsist on a hand-to-mouth existence. The loans provided by the scheduled commercial banks and Regional Rural Banks of various nationalised banks account for a mere Rs 20,000 crore, according to a latest edition of 'The Organiser'.

Many states have expressed concern about the ability of the Cooperatives to write-off such huge amounts of farm loans as Finance Minister P Chidambaram expected the states to share a part of this burden. The Cooperatives had, however, not received any indication as to how and in what form they would get replenishments from the refinance institutions as they cannot bear the waiver losses saddled with loans they cannot collect.

In a signed comment Mr R Balashankar, the Editor of Organiser, the mouthpiece of the RSS, said the Economic Survey for 2007-08 had recommended that the government allow cent per cent FDI in greenfield private rural agricultural banks which should be free to set up innumerable branches in rural or semi-urban areas. They should be free to take over other private sector banks.

The greenfield private rural agricultural banks backed by FDI capital will not just enter but swarm the rural India and purchase farm lands, establish commercial complexes and destroy agricultural economy as part of reform agenda, the RSS said. The government does not offer the cooperatives instant liquidity for the banks, thereby creating problems of solvency for the banks where the farmers with prompt repayment record also happen to be depositors in these banks.

''This will spell the death knell for rural cooperative banks,'' the latest edition of 'The Organiser' said.

''The Prime Minister announced a suicide relief package for 31 districts of the country. During the last two years, this package has not stopped suicides.'' ''The Finance Minister's claim that he will execute the mega write-off programme in three months is bogus. He has other plans'', the paper said.


Please Wait while comments are loading...