PM promises action against farm loan waiver ‘cheats’

Amid an opposition uproar over the Comptroller & Auditor General of India's indictment of the government's 2008 agriculture loan-waiver scheme, Prime Minister Manmohan Singh sought to assure parliament today that ''stringent action" would be taken against ''defaulters'' if any.

The prime minister's statement in the Rajya Sabha came amid an opposition roaring for blood over the alleged "siphoning off" of farmers' money and a "scam" revealed by the CAG report, tabled in parliament on Tuesday.

"The reference is to the CAG report on loan waiver scheme. This is a matter which should be entrusted to the Public Accounts Committee (a cross-party panel of the Lok Sabha) as per normal practice. If there are any irregularities, which have been shown, I assure the House that we will take stringent possible action against the defaulters," Singh said in his reply to the House.

The (CAG) observed in its report that bankers had resorted to large-scale irregular practices while implementing the agriculture debt waiver and debt relief (ADWDR) scheme of 2008.

The loan-waiver scheme, created by finance minister P Chidambaram, was seen even then as clearly politically motivated. Apart from the cost to public sector banks and the exchequer, economists had pointed out the strong possibility that the scheme would be misused by bigger farmers and do little for the marginal ones.

According to a CAG sample survey tabled in parliament on Tuesday, about 17 per cent of the loans were waived in violation of guidelines, either by ineligible persons being given the waiver or not covering genuinely needy persons (See: CAG picks holes in Rs52,000-cr farm debt waiver scheme).