Rattled by a CAG audit report that many farmers were not issued debt waiver and debt relief certificates, the finance ministry has ordered such certificates be issued to the farmers by this month itself.
The discrepancies were reported in Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS), a Rs. 52,275-crore plan for small and marginal farmers launched in 2008.
The CAG report says there had been tampering and over-writing, inadequate documentation to enable ineligible farmers to avail benefits.
While the benefits were only extendable to farmers directly, a substantial portion of the loans was extended to micro finance institutions, which was against the mandate of the scheme.
Sources said the report has already been finalised and sent for the Presidential nod.
The finance ministry has written to RBI, which was responsible for monitoring the scheme’s implementation and NABARD, which was to supervise the funds’ disbursal from rural banks and cooperatives.
RBI and NABARD have to ensure that the money is recovered from ineligible beneficiaries, responsibility fixed on errant bank officials and FIRs filed in cases where records had been tampered with.
Aimed at benefiting 3.45 crore farmers, the scheme was to “declog the lines of credit that were clogged due to the debt burden on the farmers and make them eligible for fresh loans.”
It envisaged complete waiver for small and marginal farmers and a one-time settlement scheme for other farmers.
Analysts claim the farm loan waiver played a big role in aiding the Congress-led United Progressive Front ease into power the very next year.
It did extremely well in states where the most loans were disbursed — UP, Andhra Pradesh, Maharashtra which garnered 59% of the total Rs.52,275 crore disbursals.