RBI jolt to Naidu
Hyderabad: RBI Jolt to Naidu, The Reserve Bank of India has sent a letter to the AP government opposing the proposal.
- State is free to reimburse loan on its own, says RBI
- Naidu convenes a meeting of cabinet sub-com-mittee, other officials
- Agri minister says RBI is nobody, we will ask Centre for help
Hyderabad: The Telugu Desam Party’s strategy planners are faced with the herculean task of fulfilling the promise of loan waiver to farmers and self-help groups, the two promises which helped the party to propel into power after about a decade. This is the second shock for the AP Government coming in the wake of the Planning Commission rejecting special status for the State.
The Reserve Bank of India has sent a letter to the AP government opposing the proposal. The RBI said they would have no objection if the state government was willing to reimburse the entire loan dues in cash. The RBI executive director Deepali Pant Joshi in a letter to the AP government said that such schemes would set up a wrong precedent and would discourage the farmers from paying the EMIs in time.
Taken aback by this development, the Andhra Pradesh Chief Minister N Chandrababu Naidu convened a meeting of the cabinet sub-committee and senior officials on Tuesday. Emerging from the meeting, the State Agriculture Minister P Pulla Rao said their government would give total clarity on the issue of how they would implement the crop loan waiver scheme by June end.
He said they were holding talks with various bankers to formulate modalities of the scheme. At the same time, the committee, set up by Naidu, is also finding ways and means to do justice to all the farmers while implementing the scheme, “The government is committed to implement the scheme and there is no question of going back on it,” he said.
The Minister said that the panel, set up by Naidu, would submit its interim report by June 22. Basing on that report, the government would arrive at a decision on how to effectively implement the farm loan waiver scheme, he said.
When asked about the letter written by the RBI to the AP government denouncing the crop loan waiver proposal, Pulla Rao replied, "How can those banks which are allowing one-time settlement of industrial debts by the businessmen not accept the crop loan waiver which will benefit lakhs of farmers? We are confident that we will convince the Centre and the RBI in this regard. Our government is writing letters to the Centre and RBI over this".
According to conservative estimates, farm loan waiver in Seemandhra region could burden the exchequer by over Rs 50,000 crore. Coupled with waiver of loans to women help groups, the figure could be about Rs 80,000 crore.