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Recovery of crop loan to be deferred: PM

New Delhi Nov. 13. The Prime Minister, Atal Behari Vajpayee, today declared that the Government would defer, during the current financial year, recovery of crop loan including interest from farmers in the 14 drought-affected States and set up a corpus of Rs. 500 crores for modernisation of the plantation sector.

Mr. Vajpayee's suo motu reiteration of an earlier decision on crop loans comes in the face of the recent criticism by the Congress of "inadequate assistance" from the Centre for the drought-hit States and ahead of the crucial meeting on Saturday of the Task Force on Drought headed by the Deputy Prime Minister, L.K. Advani.

However, it now seems almost certain that the Government would not concede the affected farmers' plea for an interest waiver on loans for this year. A deferment would only mean that farmers who have lost their crop during this kharif season due to the failure of the south-west monsoon would face an additional debt burden next year. In any case, the deferment of loans (conversion of short loans into term loans and rescheduling of interest payment etc.) had already been announced by NABARD in July this year, based on the guidelines of the Reserve Bank of India of 1998. Besides, the Government is yet to take a decision on a proposed Rs. 5000-crore package for drought relief, which includes a waiver of interest for farmers who have suffered 50 per cent crop loss, input subsidy for affected farmers and a roll back of fertilizer prices in the drought-hit States.

Apart from this, the affected States had together given an initial estimate of about Rs. 19,000 crores for relief expected from the National Calamity and Contingency Fund (NCCF) operated by the Task Force. Even if this figure appears inflated, no funds have been released so far from the NCCF on the ground that the States should first utilise the advances taken from the Calamity Relief Fund (CRF) under the Agriculture Ministry.

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