Hyderabad: The Congress government is set to take over Rs 32,000 crore of existing crop loans of about 30 lakh farmers, to fulfil its pre-poll promise of waiving off crop loans of up to Rs 2 lakh per farmer.
Sources said that a special corporation will be set up for the purpose and that the finance department has initiated talks with bankers on Monday.
Official sources said that the bankers agreed to transfer Rs 32,000 crop loan dues to the crop loan waiver corporation, provided it had an income and repayment capacity. The state government has proposed to divert a portion of revenue earned through stamps and registrations, excise and commercial tax departments to the corporation and repay loans to banks through EMIs in the next five years, in monthly tranches of Rs 500 crore to Rs 600 crore.
The commercial taxes department rakes in about Rs 2,500 crore per month, stamps and registration department about Rs 2,000 crore per month and the excise department Rs 1,200 crore per month. Of this, the government planBRs gs to contribute up to 10 per cent to the crop loan waiver corporation.
The previous BRS government promised crop loan waivers of up to Rs 1 lakh during the 2014 and 2018 Assembly polls. However, it released funds to banks in phases due to which farmers incurred a huge interest burden. Subsequently, the loan waiver scheme did not serve the intended purpose as farmers lost the waiver amount, with banks adjusting the amount towards interest arrears.
In 2014, the BRS government waived Rs 17,000 crore of loans taken by 36 lakh farmers. But it released Rs 4,000 crore to banks per year, due to which it took five years to clear the arrears. Banks collected the interest over the five years from farmers.
Over the promise made in 2018, the BRS government failed to implement a crop loan waiver scheme until August 2023. Just before the Assembly polls notification, the state government announced to release Rs 19,000 crore to banks, but it could not be implemented as the model code of conduct for polls came into effect in the second week of October. It waived loans up to Rs 35,000 in 2019 and 2020.
Banks have declared about 20 lakh farmers as defaulters and froze their accounts due to a delay in the release of funds.
Taking these factors into account, the newly formed Congress government has decided to waive loans of farmers up to Rs 2 lakh each in one swoop, by taking over their loans and ensuring farmers are benefitted.
