Resentment against loan waiver norms

Special Correspondent

THIRUVANANTHAPURAM: The guidelines issued for implementation of the Agriculture Debt Waiver and Debt Relief Scheme have caused widespread resentment among farmers because of the possibility of lakhs of farmers getting left out of the waiver net, particularly those who had taken investment loans from Cooperative Agriculture and Rural Development Banks (CARDBs) across the country.

According to K. Sivadasan Nair, chairman, National Cooperative Agriculture and Rural Development Banks Federation, the guidelines would make long-term investment loans taken before 1997 and term loans rescheduled in 2004 and 2006 ineligible for relief. “The intended benefits of the agricultural debt waiver and relief scheme will not be available to almost 30 lakh farmers who have taken investment loans from CARDBs because of the guidelines,” he said.

Under the guidelines, loans given before December 31, 1997, are excluded from the purview of the scheme. This provision makes about 20 per cent of outstanding loans taken by about 14.5 lakh farmers from CARDBs alone ineligible for relief under the scheme. Loans for purposes such as construction and renovation of irrigation wells, plantation and horticulture, land development and soil conservation have a repayment period of 15 years. Large number of such loans issued before 1997 are still left with outstanding balance and balance period for repayment. Such loans were also eligible for waiver or relief under the original announcement in the budget.

Investment loans

Similarly, only overdue instalments as on December 31, 2007, in respect of investment loans rescheduled in 2004 and 2006 are included in the ‘eligible amount’ under the scheme. Under the loan rescheduling scheme of 2004 and 2006, the overdue instalments were segregated into a separate account to be collected in three yearly instalments after a grace period of two years. In respect of loans rescheduled in 2004 and 2006, no principal amount is either due or overdue as of now. In the case of loans rescheduled in 2004, only interest demand had been raised and fallen due as on December 31, 2007. Since any instalment of the rescheduled loan has not become overdue again, there was no meaning in the provision that only overdue instalments of the rescheduled investment loans would be included in the ‘eligible amount,’ he said.

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