Having failed so far to make any headway in getting the state’s borrowing limit increased from the Centre to fund a promised loan waiver to farmers, Punjab’s Congress government on Monday turned towards its own resources and decided to use rural development fund and market fee charged on sale of agriculture produce towards funding the crop loan waiver.
In a meeting chaired by CM Capt Amarinder Singh, the state cabinet decided to amend provisions of the Rural Development Act of 1987 and Punjab Agriculture Produce Markets Act of 1961 to make possible that funds meant only for rural development could be used for the debt waiver. This will have to be passed by the assembly where the party has brute majority.
After coming to power in March, it was in June that the CM announced in the Vidhan Sabha to waive debt up to Rs 2 lakh for the nearly 10 lakh small and marginal farmers (holdings not over 5 acres), which would cost the state almost Rs 10,000 crore. From the RDF and mandi fee, the state gets Rs 3,600 crore every year. However, the state may pledge this towards repayment of a loan that may be raised.
The rural development board collects RDF through 152 market committees which function under the mandi board. Market fee is collected by the market committees on behalf of the mandi board. Both these boards have high liquidity and may at the current stage have Rs 1,000 crore each in their coffers.
{{/usCountry}}The rural development board collects RDF through 152 market committees which function under the mandi board. Market fee is collected by the market committees on behalf of the mandi board. Both these boards have high liquidity and may at the current stage have Rs 1,000 crore each in their coffers.
{{/usCountry}}Anyway, the waiver has been criticised for being “conditional” even as the Congress manifesto had announced complete waiver of farm debt.