The Andhra Pradesh Government on Monday announced a massive loan reschedule/waiver scheme for farm sector, weavers and women self-help groups which entails a financial commitment of up to ₹45,000 crore.
Announcing the decision taken at the State Cabinet, the Chief Minister N Chandrababu Naidu said, “The Government decided to go ahead with the decision in spite of huge financial commitment this would bring to the State. This was a major election promise and we are keen to implement it as we believe farmers are in dire need of the waiver.”
He said the Government had decided to implement the waiver scheme despite the RBI not giving clearance for the revised period. “This was the first file I signed after assuming office as Chief Minister and we are committed to implementing it at any cost,” he explained.
The Committee, headed by P Kotaiah, former Nabard Chairman, had earlier in the day, submitted its report on the loan waiver and also modalities. It had recommended that loan be waived up to ₹1 lakh per farmer and ₹50 lakh gold loan.
However, the Cabinet has decided to cover up to ₹1.5 lakh for farmers, taking the burden of one loan in a household and up to ₹50,000 for gold loans. “This will entail a financial commitment of up to ₹35,000 crore for farm loans alone, and about ₹7,500 crore for Dwcra women and another ₹600 crore for other loans. In all, this will go up to ₹42,000 crore to ₹45,000 crore. Even the State Level Bankers Committee does not have full details. They are in the process of compiling,” he said.
Escrow accounts
“We are committed to mobilisingnecessary funds for the scheme. This will be by way of securitisation of Government assets, creation of separate escrow accounts for revenues accrued from excise, transport and mining departments and augmenting additional revenues,” he said.
“With the State financial health is a shambles, and faced with a deficit of about ₹16,000 crore and a debt burden of over ₹1,00,000 crore, we are not resorting to borrowings,” he said.