‘Loan panel’ to seek RBI opinion

Kotaiah Committee appointed to advise on farm loan waiver is seeking RBI opinion

Hyderabad: The Kotaiah Committee appointed by the AP government to advise on the farm loan waiver has asked for some more time to give its interim report. The Committee members met Andhra Pradesh Chief Minister N. Chandrababu Naidu, on Sunday at his residence and informed that it could not submit a report without consulting the RBI and officials of the Union finance ministry.
Besides Mr Naidu, finance minister Yanamala Rama Krishnudu, agriculture minister P. Pulla Rao and others were present.

Mr Naidu, however, made it clear that he would go ahead with the loan waiver scheme at any cost and asked the Committee to give its report at the earliest. The Committee warned that the loan waiver would lead to many problems for the state government. The RBI and the Union finance ministry would not agree to the waiver of farm loans and co-operative banks and rural banks would collapse financially.

Apart from discussing modalities in which the waiver will be implemented, the deadline was discussed. And, it came up that the loans can be waived either till October, 2012 or September, 2013 or March 31, 2014.

The Committee said that if March 31, 2014, was taken as the deadline, and if the waiver was implemented to farmers who had taken loans below Rs 1 lakh, the burden on the state government would be Rs 15,000 crore. If it was extended to all farmers, including those who had taken loans of more than Rs 1 lakh, the burden would be Rs 21,000 crore.

After the meeting, finance minister Mr Yanamala Rama Krishnudu said that after the Committee submits its report, the state would announce guidelines for the waiver of farm loans. He said that they would ask the banks about rescheduling the loans and to give fresh loans to farmers. He also said that the government would ask the banks to not pressurise the farmers regarding payment of loans.

Irregularity in loans

The panel has informed the state government that it has noticed many irregularities regarding loans. The Committee said that after AP Chief Minister N. Chandrababu Naidu announced the waiver of farm loans, farmers started taking loans although agriculture operations were over.

Sources said, the Committee pointed out that at Ravinutala in Prakasam district, 80 per cent loans taken from Andhra Bank were bogus. In Kurnool, agricultural loans of Rs 4 crore was taken by a single family.

( Source : dc corespondent )
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