The congress administration plans to take over Rs 32,000 crore in existing crop debts owed to almost 30 lakh farmers to implement its pre-election pledge of waiving agricultural loans of up to Rs 2 lakh per. According to sources, a separate corporation would be formed for this purpose, and the finance department began discussions with bankers on Monday.

According to official sources, the lenders agreed to transfer Rs 32,000 in agricultural loan dues to the crop loan waiver organization as long as it had income and repayment capability. The state government has suggested diverting a portion of revenue from the stamps and registrations, excise, and commercial tax departments to the corporation and repaying loans to banks via EMIs over the next five years, in monthly tranches of Rs 500 crore to Rs 600 crore.

The commercial taxes department earns around Rs 2,500 crore per month, the stamps and registration department earns Rs 2,000 crore per month, and the excise department earns Rs 1,200 crore per month. The government intends to donate up to 10% to the Crop Loan Waiver Corporation.

The former BRS administration pledged crop debt exemptions of up to Rs 1 lakh in the 2014 and 2018 assembly elections. However, it delivered funding to banks in increments, resulting in a significant interest burden for farmers. As a result, the loan waiver system did not achieve its original purpose, since farmers lost the waiver money, which banks adjusted towards interest arrears.

In 2014, the BRS administration forgave Rs 17,000 crore in debts taken by 36 lakh farmers. However, it provided Rs 4,000 crore to banks each year, which took five years to erase the arrears. Banks earned interest from farmers for five years.

Despite a pledge made in 2018, the BRS administration failed to launch an agricultural debt relief plan until august 2023. The state government indicated just before the announcement of the assembly elections that it would pay Rs 19,000 crore to banks, but this could not be done since the model code of conduct for polls went into force in the second week of October. It forgave debts of up to Rs 35,000 in 2019 and 2020.

Banks have designated around 20 lakh farmers as defaulters and frozen their accounts due to a delay in the distribution of cash. Taking these concerns into account, the newly established congress administration has planned to erase farmers' loans of up to Rs 2 lakh per in one go, by taking over their liabilities and guaranteeing farmers benefit.
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Telangana

SIBY JEYYA

09/01/2024 08:51 AM