Andhra loan waiver

The Andhra Pradesh government announced one of the biggest loan waiver schemes in recent times that would cost the exchequer over Rs.43,000 crore.
Farm and gold loans taken by farmers to the tune of Rs.35,000 crore will be waived with immediately effect. About Rs.7,500 crore loans taken by selfhelp group (SHGs) members and Rs.500 crore by weavers and families from scheduled castes were also waived.
Announcing this after a cabinet meeting, chief minister N Chandrababu Naidu said that those who cleared their loans would also benefit as the state would deposit Rs.1.5 lakh in their accounts by way of cash transfer. “We have decided to extend the loan waiver scheme to honest payers and those who are not in a position to take the burden. We will pay directly to banks to clear the loans taken by farmers and in respect of those who have been prompt in repayments, we will deposit the amount in their accounts.
This will cost the government over Rs.43,000 crore but will benefit 96.27 per cent of the total farmers,“ said Naidu.
In order to fulfill its poll promise, the Naidu government decided to raise loans from banks by guaranteeing future revenues of profit-making public sector undertakings. The government will open an escrow account from which the banks would get regular payment from the government. At the same time, AP would impose a “farmer welfare cess“ on liquor sale. The transport department would also impose additional cess.
Similarly, the government would securitize some of its assets and issue bonds in the financial market to raise money to fund the loan waiver scheme. “I made the loan waiver promise when the state was united and had huge revenues. But now, we are in financial crisis. But to keep my word to farmers, I have decided to implement the loan waiver in letter and spirit though it is a big burden on our finances,“ said Naidu. The loan waiver scheme will benefit more than 30 lakh farmers and 7.5 lakh self-help groups. He said the government corporations would raise loans in the open market and there would be no need to raise the FRBM limit which is pegged at about Rs.15,839 crore at present.
The cabinet headed by Naidu met here and decided to implement NTR Sujala Sravanthi, a drinking water supply scheme in villages, by involving corporates, NGOs and selfhelp groups. The modalities will be finalized at the next cabinet meeting. Disclosing the decision taken at the cabinet meeting, Naidu said that Petronet's proposal to set up an LNG terminal near Kakinada was cleared. This would bring in Rs.3,085 crore tax revenue for the AP exchequer. The cabinet also passed a resolution demanding Centre's intervention in the Eamcet counselling row between Telangana and AP and to save the academic future of 9.5 lakh students. “We have also decided to move court to protect the academic year of the students. Telangana government is acting without sanity on the nativity issue,“ said Naidu.
The cabinet dissolved all the market committee in the state which were filled with Congressmen. Naidu asked political heads of state government organisations to save their honour by gracefully quitting. “All heads of corporations including chairman of Tirumala Tirupati Devasatanams (TTD) Board have to resign gracefully . Otherwise we will show them the door,“ said Naidu.

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