AP to earmark Rs 1,000 cr for farm loan waiver in first Budget

The amount is only a fraction of over Rs 42,000-cr financial liability arising out of the costly election promise

The  Andhra Pradesh government  is likely to make a provision for Rs 1,000 crore towards the proposed loan waiver scheme in the annual Budget this year. The government of the truncated AP is going to present its first Budget later this month.

The amount allocated for the loan waiver is only a fraction of over Rs 42,000-crore financial liability arising out of this costly election promise according to government’s own admission. Official sources, however, said  the budgetary allocation meant for the scheme was only a token gesture to show the government was committed to implement it.  

The mobilisation of financial resources required to repay the loans on behalf of the borrowers would  be taken up outside this budgetary provision, they said.

A couple of days ago, the state government formally constituted a resource mobilisation committee under the chairmanship of industrialist-turned-MP YS Chowdary for suggesting ways to raise the required money towards this. The government  had indicated 3-4 ways by which it could raise the resources, including sale of assets.

On the other hand, officials maintained there was no change in the government stand as far as its request for loan recast in 572 mandals across the state even after the Reserve Bank of India (RBI)'s insistence on crop yield  parameter.

“Obviously, the government cannot go back on the very premise based on which it had sought restructuring of  loans. The data and information have already been given to the RBI and there isn’t much left to add to what we had already told,” an official in the AP government pointed out.

Meanwhile, the Telangana government has reportedly addressed a letter to the RBI reiterating its request for restructuring of crop loans in the state. In the letter, it has argued almost on the lines of AP, saying the district-level crop yield averages could not be attributed to the ground situation of individual mandals (lower administrative units), sources said.

“We cannot change the statistics except putting forth our own point of view on this matter,” a senior official in the Telangana government said, adding the government would take further steps on the loan waiver after receiving a final word from the RBI.  Officials of the finance department are expected to meet the RBI authorities one last time in this regard.