Centre, Maharashtra working with banks

Our Bureau

Mumbai, Aug. 4

Stung by strong criticism over the suicides by farmers in the Vidarbha region, the Centre and Maharashtra overnment are working with financial institutions for the speedy disbursal of the Vidarbha packages.

The Prime Minister's Vidarbha package is worth Rs 3,750 crore and the State package is Rs 1,200 crore. The National Bank for Agriculture and Rural Development (Nabard), the agency that is implementing Prime Minister's package along with banks, has introduced measures such as rescheduling of loans and waiver of interest.

This package, which consists of two parts - credit and real sector, will be augmented said, Mr Y.S.P. Thorat, Nabard's Chairman. The annual credit plan for the six districts in Vidarbha has been increased by Rs 1,275 crore. The agricultural credit target has been revised from Rs 1,308 crore to Rs 2,583 crore. The amount has also been allocated among six districts on a bank-wise basis. The farmers would be charged the standard interest rate of seven per cent.

Credit package

In the credit package, there would be a waiver of entire interest on overdue loans as on July 1, 2006. The amount allotted to interest waiver would be Rs 712 crore. "The waiver of these loans ensure that farmers have no past interest burden and are eligible for fresh loans," said Mr Thorat.

"The overdue loans of the farmers on the same date have been rescheduled over a period of three to five years with one year moratorium," he said. The loans disbursed as on August 1, 2006, is Rs 950 crore, as against Rs 730 crore in 2005-06.

"There is a significant crop diversification from cotton to soya and tur in Vardha districts," he observed.

Real sector

The real sector broadly comprises irrigation, watershed, provision of inputs, extension and farm advisory services.

On the irrigation side, 1.59 lakh hectares would be brought under assured irrigation at a cost of Rs 2,177 crore over a period of three years by the State. "This would include the completion of all ongoing major and minor irrigation projects," he said.

On the watershed side, three initiatives like check dams, watershed development and rain harvesting schemes would be taken.

In the six districts of Vidarbha, 500 check dams would be constructed over the next three years at an average cost of Rs 2 lakh per check dam. That would cost Rs 60 crore per year. "Nabard would meet this through its Rural Infrastructure Development Fund," he said.

Ninety-thousand hectares would be treated under the water-shed programme, with an outlay of Rs 50 crore. Nabard would meet this through its water-shed development on a full grant basis. The project would create 50 lakh mandays over a period of four years, thus providing rural employment.

Nabard has set a target of linking 1,000 self-help groups in these six districts, per month, said Mr Thorat.

A committee would also be set up chaired by Mr M. Balachandran, Chairman and Managing Director, Bank of India, for identifying the vulnerable people in the region and giving them financial assistance.

"Bank of India has already promoted 62 farmer clubs in the region and plans to grow the number four-fold by December 2006," said Mr M. Balachandran.

Bank of Maharashtra has set up a committee that meets every week to co-ordinate the activities, said Mr M.D. Mallya, CMD of the Bank. "Senior executives would also tour the region extensively and we also plan to upscale the farmers clubs," he said.

Central Bank of India plans to disburse Rs 250 crore in the next one month to the existing as well as new farmers. In the past few days, 40 credit camps have already been organised in the region, said Mr K. Subbaraman, Executive Director, Central Bank of India.

(This article was published in the Business Line print edition dated August 5, 2006)
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