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K.R. Srivats

New Delhi, March 26 The Union Cabinet, on Thursday, is likely to give its formal nod for the creation of “farmers debt relief fund” towards the Rs 60,314-crore debt waiver and debt relief scheme announced in Union Budget 2008-09.

Indications are that the Cabinet’s approval would also be obtained for infusing Rs 10,000 crore, provided in the third and final batch of supplementary demand for grants, into the newly created fund.

This amount would be utilised for achieving the objectives of the debt waiver scheme, which would cover all agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and remained unpaid till February 29, 2008.

The Finance Minister, Mr P. Chidambaram, has already announced in Parliament the manner in which the lending institutions would be compensated and also how the debt waiver scheme would be financed.

Provisional estimates indicate that the relief to be offered to farmers would be about Rs 60,314 crore, comprising Rs 50,524 crore of debt waiver to small and marginal farmers and Rs 9,790 crore as relief to other farmers as a one-time settlement (OTS) at 25 per cent of their overdues.

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Cabinet nod for farm debt relief fund likely today

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