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States to sign MoU for cooperative package: FM

The Rs 13,596 crore revival package aims to boost flow of credit to agriculture, especially to small and marginal farmers.

business Updated: Jan 07, 2006 16:11 IST

TheCentre onm Saturday asked states to sign an MoU to implement the Rs 13,596 crore cooperative revival package as suggested by the Vaidyanathan committee.

"Government has accorded in-principle approval for implementation of the report of Task Force on Revival of Short-Term Rural Cooperative Credit Structure (CCS) chaired by A Vaidyanathan. It is sincerely hoped that your state will agree to implement the package," Finance Minister P Chidambaram wrote to state chief ministers.

States will now have to confirm the same to the Union Government at the earliest.

"NABARD has been requested to make a detailed presentation of the package and its conditionalities in case the states and union territories so desire," Chidambaram said.

A draft Memorandum of Understanding would shortly be sent to the States for consideration and execution, he said.

In view of the importance that Centre accords to rural credit and the role of cooperatives in providing the same, the Finance Minister sought early action by states on implementing the revival package.

The package aims to boost flow of credit to agriculture, especially to small and marginal farmers.

The revival package is aimed at reviving short-term rural cooperative credit structure (CCS) and make it a well-managed and vibrant medium to serve the credit needs of rural India, especially the small and marginal farmers.

It seeks to provide financial assistance to bring the system to an acceptable level of health.

First Published: Jan 07, 2006 16:11 IST