Loan waiver: TS may issue bonds to farmers

Proposal in case the RBI ignores demand for rescheduling of loans

Hyderabad: The TRS government is considering issuing bonds to farmers in case the Reserve Bank of India (RBI) did not agree to reschedule farm loans.

According to highly-placed sources, the State would do all it could to impress upon the apex bank to make a kind consideration to its demand in view of wide spread damage to crops in the last five years due to drought conditions, untimely rains and hailstorms.

Government is mulling to release an amount in the range of Rs 5,000 crore initially which would cover most of the farmers who had taken loan amounts in the range of Rs 20,000 to 40,000.

If its efforts with RBI go in vain, TRS govt will issue bonds of Rs one lakh to farmers and pay the interests to banks. It is hoping to clear off this entire 18,000 crore burden in the next few years, according to sources.

"The RBI Governor was told about this. He, however, was stuck to his stand that government should pay it at a single go. We told him that it was an impossible proposition to Telangana State, and for that matter for any other State, to afford such a huge sum in a single payment.

We are trying to explain to the RBI and hoping for a positive outcome," informed government sources.