Former NABARD chairman P. Kotaiah and other members of a committee constituted by Andhra Pradesh government to work out modalities for crop loan waiver scheme, met Reserve Bank of India Governor Raghuram Rajan to apprise him of the reasons behind the decision and sought RBI’s support.
According to sources, they reportedly told Mr. Rajan that farmers in the State were facing problems either due to frequent cyclones or drought. They were likely to face a similar situation in future too because of the geographical location of Andhra Pradesh and climate change and also suggested the need for introduction of a comprehensive crop insurance scheme.
The RBI authorities were believed to have expressed concern that crop loan waiver might discourage credit culture and offered to instruct the banks to go in for rescheduling of loans. They reportedly told the committee members that credit culture was just picking up in the wake of the crop loan waiver scheme implemented earlier by the Government of India.
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After holding discussions with Secretaries and other officials in the Union Finance Ministry in New Delhi on June 25 and 26, the committee members would prepare the report and again meet the RBI authorities for final vetting.
The committee is now expected to submit its report to the State government in July first week. It is keen on not leaving any gap in the wake of adverse comments by Comptroller and Auditor General of India on the irregularities in the implementation of the loan waiver scheme earlier. “We have to have proper framework and guidelines as there can be benami borrowers,” a committee member remarked.
Meanwhile, Finance Minister Yanamala Ramakrishnudu said various options were being examined to implement the crop loan waiver scheme and asserted that there was no going back on Telugu Desam government’s commitment in this regard.
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