The government has announced setting up a farmers' debt relief fund with an initial corpus of Rs10,000 crore to operationalise the farm-loan waiver scheme but has not mentioned any changes in the eligibility criteria for small and marginal farmers.

This initial corpus of Rs10,000 crore to the Fund has been earmarked in the supplementary demands for grants for 2007-08. This fund will be augmented by another Rs50,314 crore in the next four years to compensate banks and other lending institutions for losses resulting from the farm loan waiver scheme.

The Rs 60,000-crore debt waiver scheme, announced by finance minister P Chidambaram in the Budget 2008-09, will be implemented by 30 June.

Although the union cabinet had yesterday approved the setting up of the fund to implement the scheme, the finance ministry is yet to enlarge the scope of coverage of the scheme to tjose owning over two acres of land as the eligibility limit for relief or doing away with the single cut-off date of 31st March, 2007 for waiver of loans.

Critics had argued that the proposed ceiling of two hectares for waiver eligibility did not take into account land productivity and excludes farmers with larger holdings in in poorly irrigated areas.

They also felt that a single cut-off date unfairly penalised farmers in certain regions. They had mooted localised cut-off dates to include a larger number of deserving farmer in distress to benefit from the waiver.