AP calls it agriculture debt redemption

September 30, 2014 12:23 am | Updated November 16, 2021 05:35 pm IST - HYDERABAD:

The Andhra Pradesh Government hereafter will call the loan waiver scheme Agriculture Debt Redemption as the former gives a wrong connotation as if banks are writing off the crop loans.

The Resource Mobilisation committee which held a meeting with CEOs of Banks here on Monday put forward a mutually benefiting proposition.

While government would assume the responsibility for clearing the crop loans of farmers of up to Rs.1.5 lakh per family, it told the banks that it was only asking for restructure, rescheduling to clear the outstanding crop loans in an incremental way over a period of four to five years. Otherwise the Non-performing assets of banks too would rise steeply.

The second proposition was for building partnership with banks in executing the development challenges of Andhra Pradesh. The huge requirement of funds for infrastructure projects with private sector participation would have to come from banks, the committee members said.

But, first government would address its pressing priorities of clearing agriculture credit of farmers. “This is a responsible act of government to help farmers affected by natural calamities. The debt relief will help them invest on cultivation on crops,” sources said.

The amount to be released by the government to the tune of Rs.5,000 crore to Rs.6,000 crore by September 30 would be deposited in the corporation being floated as the Special Purpose Vehicle. The SPV could be registered immediately on Tuesday with three directors -- Agriculture Commissioners, Principal Secretary, Agriculture and Secretary, Finance Department, sources said. The amount would be deposited in the list of crop loan borrowers forwarded by the banks to enable the farmers to seek fresh loans.

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