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Rediff.com  » Business » Interest on kharif crop loans to be waived: PM

Interest on kharif crop loans to be waived: PM

By BS Bureau in New Delhi
December 19, 2002 12:53 IST
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In a move to consolidate the political gains of Gujarat, Prime Minister Atal Bihari Vajpayee announced a programme of waiving interest on agricultural loans for the third time this year.

He has made the same announcement twice before. Although Wednesday's statement had to do with waiver of interest on kharif crop loans for the current year, on November 13 the PM had announced that in view of the drought, all crop loans would be exempt from interest and that the payment of the principal would be deferred.

When it was pointed out to him that the drought had caused such penury that deferment would only result in compounding the interest farmers would eventually have to pay, he had amended his statement and - with some egging on by Haryana Chief Minister OP Chautala and then Punjab CM Prakash Singh Badal - told the Chief Ministers that that no interest would be payable. He has repeated that statement on Wednesday.

However, at his meeting with the Chief Ministers - more than two months ago - the PM had also promised a comprehensive agricultural package in Parliament.

That package is yet to be announced. This blatantly political announcement is estimated to cost the exchequer about Rs 2000 crores (Rs 20 billion).

This is in addition to Rs 1186 crore (Rs 11.86 billion) released to 14 states earlier from the Calamity Relief Fund and 1.32 million tonnes of foodgrains worth Rs 1500 crore (Rs 15 billion) given free of cost.

In his November 13 announcement the PM had also set aside a corpus of Rs 500 crores (Rs 5 billion) for the drought-ravaged plantation sector to provide relief to the planters during periods of depressed market.

The Centre was to have been the major contributor to this corpus though some resources were to have come from the states and participating planters as well.

The details of the scheme were to have been announced in consultation with the finance ministry. This package is also yet to come.

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BS Bureau in New Delhi
 

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