CM directs Haque panel to provide clear roadmap for farm debt waiver in Punjab

Wednesday, 02/08/2017

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Chandigarh : Chief Minister Captain Amarinder Singh has directed the T Haque Committee to expedite the submission of its report, with clearly identified eligibility criteria and modalities to waive off loans of the farmers in the state.

Chairing a meeting of the committee, the chief minister reiterated his government’s commitment to farm debt waiver and issued clear instructions to the committee, and other concerned officials, to prepare a complete roadmap for time-bound waiver of the loans as announced by his government in line with the Congress poll promises.

The meeting also mulled the issue of multiple crop loans by farmers, and the committee was directed to go into the matter in detail and come out with conclusive ways and means to see how best to deal with it in the interest of the farmers.

Captain Amarinder told the meeting that he was also simultaneously pursuing with the Central government various initiatives to provide relief to the distressed farming community of the state. In a letter to Union Finance Minister Arun Jaitley, the chief minister has sought a one-time exemption to the state government from the provisions of the FRBM Act, 2003 that restrict its borrowings to a maximum of 3 per cent of the GSDP, which comes to Rs 12,819 crore. The chief minister said he had sought permission from the Centre to allow the state government to raise additional borrowings of Rs 10,000 crore from financial institutions/market to help mitigate the financial distress of the farmers.

Pointing out that on the basis of consultations within the Haque-led expert group the state government had decided to provide an institutional loan waiver up to Rs 2 lakh to marginal and small farmers, the chief minister said, in his letter, that through this debt relief, the state was proposing to give relief to around 10.25 lakh farmers and the relief package would amount to Rs 10,000 crore (approx.).

In view of the urgency and importance of the issue, a delegation led by State Finance Minister had met Deputy Governor, Reserve Bank of India (RBI) as well as Chairman, NABARD on July 26-27, this year. Though the RBI had said the state would have to arrange funds from its own resources/borrowings for the proposed debt relief scheme, given the constraint of resources, it would not be possible to extend this support to farmers from the state’s own resources, said Captain Amarinder.

Noting that the expected gap in revenues and expenditure in Financial Year 2017-18 had been projected at Rs 10,273 crore, he said the state would need to raise loans for this additional liability, but the provisions of FRBM Act, 2003, restrict state government borrowings to a maximum of 3 per cent of the GSDP, which comes to Rs 12,81 crore. As a result, the state was not able to extend this debt relief scheme to the farmers until the limit of borrowings under FRBM Act, 2003, was relaxed and enhanced as a special dispensation for this purpose, he added.

farm loan waiver issue

In view of the urgency and importance of the issue, a delegation led by State Finance Minister had met Deputy Governor, Reserve Bank of India (RBI) as well as Chairman, NABARD on July 26-27, this year.

The CM reiterated his government’s commitment to farm debt waiver and issued clear instructions to the committee, and other concerned officials, to prepare a complete roadmap for time-bound waiver of the loans as announced by his government in line with the Congress poll promises.