Business Daily from THE HINDU group of publications
Tuesday, Aug 14, 2007
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Business Daily from THE HINDU group of publications Tuesday, Aug 14, 2007 ePaper |
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Climate & Weather Money & Banking - Farm credit Agri-Biz & Commodities - Agricultural Policy Industry & Economy - Rural Development Link crop loan with weather: Panel on debt
The Radhakrishna committee moots Rs 10,000-crore fund in 100 distressed districts. Suggests setting up of moneylenders’ debt redemption fund
Our Bureau Mumbai, Aug. 13 Interest rate waiver on agricultural loans for one year in the event of natural calamities, and a Rs 10,000-crore development programme in distressed districts are some of the recommendations made by a Government committee on rural indebtedness. For crop failure, the group has recommended rescheduling of loans and giving farmers new loans. If the crop fails for a second year in a row, then the interest for the extended one-year period should be waived and the financial burden shared between Central and State governments, the group said. The group has suggested cyclical crop loans, where the loan would be treated as financial assistance linked to the weather rather than as an annual feature. It could be initiated on a pilot basis in a few districts. Loans of farmers affected by natural calamities should be rescheduled and interest should be waived for an extended period of up to two years (both for short- and long-term loans) – somewhat on the lines of Corporate Debt Restructuring Schemes for industrial loans. The financial burden should be equally shared between the Central and State governments, the report said. The group has identified 100 distressed districts and recommended Rs 10,000 crore for agricultural development programmes in these districts. The expert group has recommended a one-time measure of providing long-term loans by banks to farmers to help them repay their debts to moneylenders. The cost of this scheme should be met by creating a moneylenders debt redemption fund with contribution from central and state governments, for which initially Rs 100 crore should be earmarked, the report said. It suggested NABARD to work on the formalities of this scheme. Banks and co-operatives should increase their rural branch networks and also offer mobile banking so that institutional credit can reach more farmers. They should also provide support to microfinance institutions so that they become an integral part of mainstream banking. Banks, agriculture clinics, self help groups should provide credit counselling to farmers. NABARD can help to provide training to such groups, the report said. The group, which was set up by the banking division of the Ministry of Finance, was headed by Mr R Radhakrishna. The members include Mr P.V. Shenoi, Mr Y.S.P. Thorat and Mr Kantha Kumar.
Related Stories: Farm credit surges to Rs 1,80,486 cr Banks to cut lending rates on farm loans Short-term credit at 7 pc — Farmers to get from kharif season More Stories on : Climate & Weather | Farm credit | Agricultural Policy | Rural Development
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