Debt waiver process for Punjab farmers starts, Rs 5,500 cr to be raised soon
3,500 agricultural cooperative societies asked to verify names of farmerspunjab Updated: Nov 08, 2017 09:49 IST
The process to waive off farmers’ debt has started in the state with the government close to arranging Rs 5,500 crore, a major portion of the total waiver plan of at least Rs 9,500 crore. Sources in the government said the waiver could take place within six weeks. Initially, the government would settle farmers’ debt with the state cooperative establishment.
- Preparation of list of beneficiary farmers, who fall in small (2.5 to 4.99 acre land ownership) and marginal (up to 2.49 acre ownership) to be made by 3,500 cooperative societies. This will also detail how much they owe different agencies – cooperative societies, public sector banks and private banks
- The entire loan, up to Rs 2 lakh, to be waived off, even if taken from multiple sources
- Crop loan from agricultural cooperative societies to be waived off first, followed by public sector banks and then private sector banks. If there are two loans from one bank, then the loan taken earlier to be waived off first
- Linking all loan accounts to the Aadhaar number of beneficiary farmers is mandatory
- Deputy commissioners will coordinate and supervise waiver process with banks and cooperative societies
- Lists of beneficiaries will be verified by the revenue staff, and pasted in villages for social audit and objections and clarification
- A final list be drawn out. On that basis, the agriculture department will transfer the waiver amount to the DCs to be sent to the banks
- Farmers will get a waiver certificate
To facilitate this, all 3,500 agricultural cooperative societies have been asked to prepare and verify names of farmers, who fall within the ambit of the notified debt-waiver policy.
As part of honouring its pre-poll promise, Punjab chief minister Captain Amarinder Singh, in June, made a statement in the Vidhan Sabha of waiving off up to Rs 2 lakh debt (crop loan) on small and marginal farmers, touching a total of 10.25 lakh people. However, the government, facing acute financial crunch, had to work hard to arrange the money.
How is the money being raised
On October 16, the state council of ministers decided to amend the Rural Development Act, paving the way for using the rural development fund for debt waiver. The Rural Development Board, which manages funds collected from sale of crops in the state, is in the process of passing resolutions to pledge its income for 5-7 years. This will help the government raise loans to the tune of Rs 5,500 crore from banks and financial institutions. The CM is the ex-officio chairman of the Rural Development Board. The government collects 3% rural development cess on sale of crops.
“Banks are awaiting sovereign guarantee from the state to clear the loan, which is expected any day,” said a source in the government. The state government resorted to using the rural development fund, as it failed to get an assurance from the Centre on getting its borrowing limit increased from existing Rs 12,819 crore. “The government will soon arrange the remaining Rs 4,000-4,500 crore to finish paying the promised debt,” a government officer said.