Loan waiver to be announced ‘formally’

By C. ANAND REDDY

New Delhi, May 20: The Central government will come out with a formal announcement of actual implementation of the Rs 60,000-crore loan waiver package to farmers any time.

The UPA government at the Centre, completing four years on Thursday, and its commitment to implement the Rs 60,000-crore loan waiver package to farmers by the end of June are being seen as more than a mere coincidence.

Finance minister P. Chidambaram has reiterated that the package deadline of June will be met. However, according to officials of Nabard (National Bank for Agriculture and Rural Development), the Centre is yet to announce the scheme formally. Nabard will be the implementing agency, being the apex agricultural bank of the country.

Higher officials of public sector banks are also expecting such a formal announcement from the government.

"The loan waiver package is a budgetary announcement. The government will come out with a formal announcement of the scheme and each bank will be informed about the waiver amount," Punjab National Bank executive director K. Raghuraman told this newspaper.

"The waiver amount due to each bank will be credited to its account. In other words, The debit balance will be supplied by the government which, in effect, implies that each eligible farmer has repaid his loan. This in turn will make such farmers eligible for a fresh loan as they are no more defaulters," Mr Raghuraman said.

All scheduled commercial banks, cooperative banks and regional rural banks are expected to be ready with the database of loan defaulters and according to banking sources, several banks are ready with such a data. Bankers believe that the deadline will be June 30.

The UPA came to power promising a better deal for farmers and rural India. If the Congress-led government finishes this task in time, it will add another feather to its "farmer-friendly" cap.

Going by the pitched reactions of other political parties soon after the announcement of the loan waiver package in the 2008-09 Budget, its actual implementation in the days to come will throw a similar challenge to the ruling coalition as other parties will be more than ready to indulge in nit-picking and digging out flaws in the package at the ground level.