KCR to seek loan to waive crop loans
Hyderabad : Seeking loan to waive the loan. This appears to be one of the options before the Telangana government to keep up its key election promise.
Faced with a massive financial burden on account of loan waiver promise, the Telangana government is exploring various options to mobilize resources, including market borrowing, to implement the loan-waiver scheme.
'We need to think out-of-the-box to fulfil the commitment in the next few weeks,' said a senior official of the finance department.
He said that the government might even consider going for market borrowing to mop up resources. According to the information submitted by the bankers, the amount to be waived off is Rs 15,795 crore and if other loans are added to it, the total amount would come to Rs 20,000 crore.
Reserve Bank of India made it clear that unless government pays the cash to the banks on behalf of farmers it would not give permission to waive off the loans. So, the government has to make allocations towards crop loans at any cost.
According to finance department officials, it would not be possible for the government to pay the loan amount to the banks through the state revenues.
The size of the budget would be anywhere between Rs 80,000 crore to Rs 90,000 crore including the financial grants from the Centre. Expenditure on salaries and non-plan account would take away about Rs 30,000 crore and it would leave the government in a tight corner on finding the amount for crop loans.
These circumstances would force the government to look for out-of-the-box ideas. It may be forced to go for a loan which would become capital expenditure making budget adjustment more difficult.
However, government has to announce the waiver decision before the Assembly budget session which might begin in third week of July, lest it would face the wrath of the opposition.
The government has to make official announcement on waiver and shall has to issue relevant orders so that the banks could lend amounts to the farmers for the Kharif season.
The season would commence in July and government shall have to make the official announcement by the end of this month. CM, Finance Minister are discussed various means to overcome the problem and receiving suggestions.
News Posted: 17 June, 2014
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