Adequate cash reserves for Rythu Bandhu scheme

TS government mobilises ₹4,000 crore from RBI under State Development Loan

May 07, 2018 11:46 pm | Updated 11:46 pm IST - HYDERABAD

Ahead of the launch of the first of its kind Rythu Bandhu investment support scheme to farmers, the State government does not foresee any difficulties as far as cash reserves are concerned.

The government has earmarked ₹12,000 crore in the budget for the implementation of the scheme, aimed at distributing ₹8,000 an acre to farmers over the two crop seasons. Though there are no financial constraints for its implementation, the government has mobilised ₹4,000 crore from the Reserve Bank of India in the form of State Development Loan in two tranches as a cushion. An amount of ₹4,114 crore has been kept ready with the banks.

According to officials, the amount was mobilised as a cushion to ensure that there would be no cash shortage with banks when farmers approach them with the cheques issued by the government.

Precaution

“As a precaution, releases to schemes which are not on the priority list have been withheld to ensure that there is no shortage of cash,” a senior official said.

The official said the government was anticipating cash withdrawals by farmers with land holdings of less than two acres.

Those with larger areas of land would opt for bank to bank transfer mode, the government expects. Withdrawal by smaller farmers is unlikely to cross ₹3,500 crore, but the government has positioned an additional ₹700 crore to meet the requirement, if more farmers opt to receive the benefit in cash, the official said. The government would consider opting for another tranche of the State Development Loan, if need be, based on the withdrawals by farmers once the scheme is launched.

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