Government exploring avenues to mobilise funds for crop loan waiver scheme

The Finance department officials are proposing various methods to raise the necessary funds. Initial estimates suggest that around Rs 30,000 crore will be required to implement the scheme.
Image used for representational purpose.
Image used for representational purpose.

HYDERABAD: As the August 15 deadline approaches, the state government is expediting efforts to mobilise funds to implement the crop loan waiver scheme.

The Finance department officials are proposing various methods to raise the necessary funds. Initial estimates suggest that around Rs 30,000 crore will be required to implement the scheme.

Chief Minister A Revanth Reddy had promised that the government will waive the crop loan by August 15. Recently he instructed the officials of Agriculture and Finance departments to formulate the modalities and guidelines for implementation of this scheme.

Officials are proposing several methods, including raising funds through bonds, setting up a corporation and mortgaging lands.

Sources said that officials are thinking of raising significant funds by selling bonds through the Reserve Bank of India (RBI). This method could potentially mobilise Rs 10,000 to Rs 20,000 crore, subject to RBI approval and FRBM limits. Reportedly, the state government officials have already consulted with the RBI and are hoping for approval.

Similarly, as per CM’s directions, officials are also exploring the establishment of a farmers’ welfare corporation to pool funds. Talks with bankers have also been initiated. “Setting up a corporation and taking loans with the government’s guarantee is a big process. The government must show to bankers that the corporation has income and repayment capacity”, an officer said.

Additionally, the government is considering mortgaging lands to raise funds, though it is not interested in auctioning valuable land. Sources said that approximately 750 acres in Medchal-Malkajgiri and Rangareddy districts have been identified for mortgaging.

All these proposals will be discussed in the Cabinet and the CM will make the final decision based on the proposals’ outcome.

Sources reported that Revanth is continuously following up with officials on the progress of fund-raising and formulation of modalities. He is also informally meeting with officials to obtain progress updates.

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