TS Govt Waives Off Farm Loans Upto 1 Lac

In a significant development,Telangana State cabinet decided to waive off farm loans up to 1 lakh, as per ruling TRS party election manifesto. The step came even as the RBI decided to limit it’s loan rescheduling plan for only a portion of the State.

Chief Minister KCR signed off on the waiver in Monday’s cabinet meet but the official orders are yet to be made public. In all, 39,07,409 farmers are likely to get benefited from the government decision, which may cost the TS Govt. close to Rs 19,000 Cr. Crop loan, gold loan taken for agricultural needs and agricultural term loans up to Rs. 1 lakh per farmer would be written off as part of the waiver scheme. The loans should have been taken prior to March 31, 2014 to be eligible for waiver.

The Reserve Bank of India (RBI) rescheduled crop loans in only around 100 mandals in three districts, Adilabad, Medak and Ranga Reddy. The TS Govt. is making last ditch attempts to convince RBI to extend the rescheduling to other mandals too. 

The State government initially wanted rescheduling of loans in around 415 mandals. In all mandals the RBI ends up rescheduling the loans, the TS Govt would pay off those loans on behalf of farmers in next 3 years in a phased manner. Where the RBI refuses to reschedule, the TS Govt has to immediately pay off the loans.

While this is the biggest promise made by the TRS in the election and fulfilling it is bound to boost the party and provide relief to farmers, in a drought-hit season, the means to pay off the loans are yet to be announced by the Govt. There is speculation the Govt. may sell off lands to gather the capital. 

Officials say that the Govt is still working out ways and means to complete the waiver.