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PM announces major relief for farmers

As a one-time measure to mitigate farmers' hardship, the government has decided to waive completely the first year's deferred liability of interest on kharif loans, Prime Minister Atal Bihari Vajpayee announced in Lok Sabha on Wednesday.

Making a suo-moto statement in Parliament, the prime minister said: "Those who have availed of this facility shall be entitled to obtain an endorsement of this waiver directly from their loaning bank."

The Reserve Bank of India will issue appropriate guidelines in this regard, Vajpayee said.

Vajpayee said he had earlier announced that the current year's interest on both the kharif crop loan and agricultural term loans would be deferred and the loans proper would be rescheduled into term loans to be recovered over the next five years in case of small and marginal farmers and three years for other farmers.

In addition, interests for one year, on both these types of loans, amounting to Rs 6,040 crore (Rs 60.40 billion), having been deferred, was to be spread out over several years as a liability, he said.

Referring to the acute shortage of water, particularly in drought-hit areas of Rajasthan, the prime minister said he had instructed the railway ministry to run additional water tanker trains, in part, to mitigate this critical deficiency.

The ministry of water resources will immediately appoint a task force to assist the affected states in this regard, he said.

He was also instructing the petroleum ministry to examine the possibility of deep drilling rigs being employed for sinking deep tube wells, Vajpayee said, adding: "We will meet the challenge of this drought together and shall ensure that the difficulties of our citizens are mitigated."

As for agricultural input subsidy, the government has already announced a grant of this to small and marginal farmers amounting to over Rs 1,490 crore (Rs 14.90 billion), Vajpayee said.

"In view, however, of the severity of the drought, I have decided that this AIS will now be extended further, to cover all other farmers too, both the sown and unsown areas, up to a ceiling of two hectares, as a one-time measure and in relaxation of existing guidelines," he said.

On the basis of assessment to be made by ministry of agriculture, in consultation with the finance ministry, all the fourteen affected states would receive additional amounts, based on actual land holding and cultivation patterns, he said.

These states would, therefore, now receive in excess of a further Rs 555 crore (Rs 5.55 billion), for combating drought, to be met from either the Calamity Relief Fund or the National Calamity Contingency Fund, the prime minister said.

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