Cash-strapped Rajasthan govt scrambles to arrange Rs6000 cr for loan waiver
Vasundhara Raje made provision for ₹2000 crore, govt now knocking doors of banks seeking ₹6000 crore in loans.jaipur Updated: May 22, 2018 22:04 IST
It is a piquant situation for the Rajasthan government which is now knocking the doors of the banks seeking loans to fund its promise of waiving off the loans that farmers had taken.
Presenting the state budget on February 18, chief minister Vasundhara Raje had announced a one-time crop loan wavier of up to Rs 50,000 for small and marginal farmers. The waiver, she announced, would be applicable to overdue and oustanding category of short term loans. Her government promised to bear a burden of Rs 8,000 crore giving benefit to nearly 20 lakh farmers.
Three months down the line, and few months before the state goes to polls, the BJP government is yet to arrange for the money to fulfill the promise. Raje had announced a provision of Rs 2000 crore in the 2018-19 budget for the waiver. The government is now engaged in arranging the remaining Rs 6000 crore.
Cooperatives minister Ajay Singh Kilak has held meetings with department and bank officials to work out modalities to arrange the funds. The government has already announced that camps will be organized to disburse loan waiver certificates to eligible farmers.
Cooperative bank officials, meanwhile, approached different banks but have not got a positive reply. National Bank for Agriculture and Rural Development (Nabarad), the apex Rural credit development bank in India, too has refused to give credit to the Rajasthan government for loan waiver.
Officer in-charge, Nabard Rajasthan, RK Thanvi said as per the bank guidelines, it cannot offer credit for farm loan waivers. “We offer refinance to apex banks for fresh loans that are given to farmers at the start of the Rabi and Kharif seasons.,” he said.
Minister Kilak, however, claimed credit would not pose a problem.
“We will get Rs 5000 crore from banks. We will get 60% funds from refinance that the apex banks get from Nabard and 40% from cooperative banks. The government will give bank guarantee,” he said. However the government has not given it in writing to the apex Bank that it will give guarantee.
Nabard will provide 40% credit at 4.5% interest while the remaining 20% will be given at an interest rate of 8.5%.
Though a budget provision of Rs 2000 crore has been made, Kilak said with interest amount, the final figure would be around Rs 2500 crore.
He said the government would get some funds from National Cooperative Development Corporation which provides agriculture credit. “We have approached to NCDC officials and they have said that the funds will be made available within 8-10 days. The funds would be given at an interest rate of 8.5-9%,” said Kilak.
He said some funds would flow from recovery of loans from farmers “Only loans up to Rs50,000 have been waived. Farmers who have loans of higher amounts need to repay those.”
Kilak said in the first phase, camps will be organized on May 26 and 27 at the Gramin Sewa Sehakari Samitis in all districts where incharge ministers will hand out loan waiver certificates to farmers. After that regular camps will be organized from June 1.