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Ramesh Sharma

Package soon: The Union Minister for Finance, Mr P. Chidambaram, and the Union Minister for Agriculture, Mr Sharad Pawar, at an interactive session with State Governments on the report of the Task Force on Revival of Rural Cooperative Credit Institutions in the Capital on Wednesday. The long-awaited revival package for long term cooperative credit structures is likely to be finalised by end-November.

Our Bureau

New Delhi, Oct. 10 The long-awaited revival package for long-term co-operative credit structures (LTCCS) in the country is likely to be finalised by end-November.

The overall cost of the package has been pegged at Rs 4,850 crore including a contingency of Rs 1,500 crore. This is most likely to be revised upwards when the Centre modifies the recommendations of the Vaidyanathan-II report to take care of some of the “reservations” expressed by the States, the Union Finance Minister, Mr P. Chidambaram, said here on Wednesday.

“I have informed States that it (revival of LTCCS) is doable and is well within the capability of the Centre and the State Governments. The cost is smaller burden than the one spent for revival of short-term co-operative credit structure. This is the last chance to retrieve our co-operative credit institutions, which are in a shambles. We will revive it and I am determined to show progress,” Mr Chidambaram said.

He was speaking to presspersons after addressing an interactive session with State Governments on the report of the Task Force on Revival of Cooperative Credit Institutions (Vaidyanathan-II report).

The Finance Minister highlighted that the task force had made 16 key recommendations for revival of LTCCs and there was “broad consensus” among the States on these recommendations.

Mr Chidambaram noted that the States had some “reservations” on eight recommendations and assured that he would modify or modulate these recommendations after taking into account what the States have said.

“I will draw a revised package by the end of this month by incorporating as many recommendations of the States as possible. The revised package would be sent to State Governments in the first week of November. After that I will call a smaller group of States to hold intensive discussions. The package would be finalised hopefully by end-November,” he said.

Meanwhile, West Bengal and some more States have said that losses arising out of non-agricultural loans should be shared by the Centre, State Governments and co-operatives in equal proportions. Under the proposed dispensation, the Centre would not share the losses arising out of non-agricultural loans.

The West Bengal Finance Minister, Dr Asim Dasgupta, said that he had also suggested that LTCCs, as in the case of short-term co-operative credit structures, be allowed to retain State Government equity up to 25 per cent of the total subscribed share capital and the amount in excess of 25 per cent be converted into grant by the State Government concerned.

The task force had pegged the sharing pattern of the financial package at 74:11:15 between the Centre, States and the co-operatives.

“If the relative shares are worked on the basis of the principles suggested by us, the shares of the Centre and the States would be 85 per cent and 9 per cent respectively and that of the co-operatives would be reduced to 6 per cent, which the co-operatives would be able to bear,” Dr Dasgupta told presspersons.

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