Farm loan waiver: Arun Jaitley offers Maharashtra no immediate financial relief
Mumbai city news: Mungantiwar sought Jaitley’s intervention to direct the RBI to allow nationalised banks to lend the state Rs34,000 crore with a staggered repayment schedule over four years so that it can repay farmers’ loansmumbai Updated: Jun 29, 2017 00:27 IST
Even as the state government began the procedure to write off loans of 40 lakh farmers by issuing a government resolution (GR) on Wednesday, how it will generate Rs34,022 crore for it remains a question mark. On Wednesday, Union finance minister Arun Jaitley gave no immediate assurance to state finance minister Sudhir Mungantiwar, who called on him on this issue in New Delhi.
Mungantiwar sought Jaitley’s intervention to direct the Reserve Bank of India (RBI) to allow nationalised banks to lend the state government Rs34,000 crore with a staggered repayment schedule over four years so that it can repay farmers’ loans. He also requested Jaitley to increase the cap on the state’s open market borrowing by Rs15,000 crore, over and above the existing limit of Rs35,000 crore, putting the state government in a position to raise funds for the waiver.
According to information, Jaitley asked Mungantiwar to deal with the RBI for the loans and staggered repayment.
“The state government will have to deal with the RBI for the loans at a lower rate and their deferred schedule of the repayment. With permission to borrow and additional Rs15,000 crore, we can manage to raise Rs34,000 crore,” Mungantiwar told HT.
The state plans to shift the old loans that have been borrowed at a high rate of interest of about 10.5% to 7.5% to save about Rs40,000 crore on its outstanding loan of Rs75,000 crore from open market borrowings. The state has also requested the Centre for the waiver of the pre-clousure charges on the payment of the outstanding loans.
Mungantiwar also requested Jaitley to extend the permission to export onions by three months to ensure rates in the domestic market do not fall on the backdrop of the bumper crop. “Maharashtra farmers have produced 2.05 lakh metric tonnes of onion and the production is 25% more than the average. Similar rise in the production in other parts of the country has resulted in the fall in procurement rate of onion. The extension to the export permission by three months will prove beneficial to farmers in getting good procurement rate. Jaitley has assured us to positively consider the demand,” Muntantiwar said.
Meanwhile, the state government on Wednesday began the procedure to waive off loans by issuing government resolution (GR) notifying the eligibility of the loan waiver. The notification stated farmers who have restructured their loans between April 1, 2012 and 2015-16 and have become defaulters till June 30, 2016 will be eligible for the waiver of up to Rs1.50 lakh per farmer. It has also clarified farmers seeking the benefit of a one-time settlement of their outstanding more than the waiver limit of Rs1.50 lakh, will have to first pay of the remaining amount to seek the benefit.
It has reiterated that except Class-IV employees, the families of the government servants, legislators, ex legislators, corporators and the members of cooperative sugar factories, district cooperative banks, cooperative milk unions will not be eligible for the loan waiver. The government has defined the family of farmers as husband, wife and children below 18 years. This means the nuclear families of the farmers will be separately entitled for the waiver.