Punjab Cabinet clears crop loan waiver scheme

Tribune News Service

Chandigarh, September 20

With an eye on the Gurdaspur Lok Sabha byelection slated next month, the Punjab Cabinet today gave its approval to notify the crop loan waiver scheme for small and marginal farmers.

With the model code of conduct currently in force, the Council of Ministers led by Chief Minister Capt Amarinder Singh directed the Chief Secretary to seek the Election Commission of India’s approval to issue the notification.

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The Congress government had in June announced waiver of the entire crop loan (up to Rs 2 lakh) of all small and marginal farmers (with landholding up to 5 acres) and a relief of Rs 2 lakh to the remaining marginal farmers irrespective of the loan amount. The scheme will directly benefit nearly 10.25 lakh farmers across the state.

Claiming that the government was keen on releasing the amount, Finance Minister Manpreet Badal said arrangements had been made to start the release of funds as soon as the EC gave its nod.

The relief amount will comprise outstanding liability under crop loan (principal and interest) as on March 31, 2017 in addition to the outstanding interest from April 1, 2017 till the date of notification.

The decision to take over the outstanding interest of  farmers from April 1, 2017 till the date of notification will lead to an additional benefit of Rs 400 crore to farmers.

The Finance Minister said the interest component would be in addition to around Rs 9,600 crore outstanding crop loan of small and marginal farmers with scheduled commercial banks, cooperative credit institutions, including urban cooperative banks and regional rural banks — collectively called “lending institutions”. The government had allocated Rs 1,500 crore for loan waiver in its 2017-2018 budget.

Meanwhile, the SAD has lashed out at the Congress government saying the government with empty coffers was misleading farmers with an eye on the Gurdaspur bypoll.

SAD general secretary Bikram Singh Majithia said the government was banking on a request made to the Centre to relax the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 to enhance the borrowing limit and that it did not have own resources to mobilise funds.

Outstanding farm loan

Rs 3,600 cr - Coop institutions

What will govt bear

• Rs 9,600 cr outstanding liability under crop loan (principal and interest) as on March 31, 2017
• Rs 400 cr additional outstanding interest from April 1, 2017, till the date of notification

Rs 6,000 cr Pvt, commercial banks

Disbursement procedure

• Branch-wise list of eligible farmers to be prepared under DC’s supervision
• Beneficiaries to get debt relief certificate, Director Agriculture to credit amount 
• If multiple accounts, waiver up to Rs 2 lakh allowed