Click to play videoNew Delhi: Finance Minister P Chidambaram on Friday said the Rs 60,000-crore loan waiver for farmers would be funded fully in cash with two-third disbursal in just 15 months.
"I have already provided Rs 10,000 crore and will provide another Rs 15,000 crore immediately after June 30, 2008. Another Rs 15,000 crore will be given in 2009-10, Rs 12,000 crore in 2010-11 and Rs 8,000 crore in 2011-12," he said in Lok Sabha.
“We will complete two-thirds of the package in just 15 months," he said. The funding would come from tax receipts and additional borrowing would be “the last resort”.
The package will be finalised by June 30 and the funding will conclude fully in three years thereafter. The original announcement was made as part of Chidambaram's Budget speech on February 29.
"I am very confident we can finance the burden of this order by regular budget exercise," he said, adding the legroom was possible due to high economic growth and fiscal prudence during the regime of the United Progressive Alliance (UPA).
The finance minister said that the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (Nabard) had been asked to give their assessment on the extent of debt and intended beneficiaries by March 14.
"I am happy and proud that in the third supplementary for this year itself, I have been able to keep aside Rs10,000 crore to kick start the farmers' debt relief fund.
"That we are able to establish the fund in year zero itself, and that too with a substantial contribution of Rs.10,000 crore is demonstration of the UPA government's determination to ensure that the debt waiver programme is fully financed."
The Finance Minister also said that the funding would see 54 per cent being set aside for cooperative institutions, 36 percent for scheduled commercial banks and 10 for regional rural banks.
Chidambaram's announcement is aimed at putting to rest doubts of opposition over funding of the largest ever loan waiver announced by the government.
With the passing of the Vote-on-Account, the Lok Sabha today completed the first phase of the budgetary exercise for 2008-09.
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