The Telangana government on Monday announced waiver of Rs17,000 crore in agricultural loans, a decision that would benefit about 3.6 million farmers in the state.
The state government, headed by chief minister K Chandrasekhar Rao, also issued orders to release Rs4,250 crore as the first installment towards repayment of 25 per cent of the Rs17,000 crore due to banks from farmers.
The state government decided to stand by its election promise to farmers that it would pay up to Rs1 lakh for each eligible farmer towards farm loan repayment, despite refusal by banks and the central bank to support schemes that would hurt the precarious finances of public sector banks.
The Rs4,250-crore payment of first installment to banks works out to an average payment of about Rs11,800 for every Rs1-lakh loan that is to be waived, considering the number of beneficiaries to be 3.6 million.
Announcing this at a press conference, agriculture minister Pocharam Srinivas Reddy said the cabinet sub-committee on loan waiver submitted its report to chief minister K Chandrasekhar Rao on Monday who immediately accepted the report and directed officials to release 25 per cent of the loan waiver amount to banks as recommended by the sub-committee.
The state government's move will enable banks to provide fresh loans to farmers for the Kharif season. Bankers are also reported to have assured that loans to farmers would be increased, and they would not insist on repaying the balance of their loans since the state government had given an assurance on the loan amount, the minister said.
The minister said the loan waiver would be applicable to all crops and genuine farmers, but said, the government would weed out ineligible farmers who availed loans by submitting bogus pattadar pass books.
The government also issued orders for setting up grievance redressal committees at mandal, district and state levels to examine complaints on implementation of the loan waiver. The committees have been directed to dispose of complaints within 30 days.
Finance minister Etela Rajender said the sub-committee on loan waiver would hold a meeting with bankers on Tuesday and work out the modalities for clearing the remaining 75 per cent of the loan waiver.