Government announces creation of a Farmers’ Debt Relief Fund- Farm Loan waiver

A scheme of debt waiver / relief has been announced in the Budget Speech 2008-09. The implementation of said scheme will waive the debts of farmers in general and small and marginal farmers in particular. Upon being granted debt waiver or signing an agreement for debt relief under the One Time Settlement (OTS), the farmer would be entitled to fresh agricultural loans from the Banks in accordance with normal rules.

The implementation of the debt waiver and debt relief scheme will be completed by June 30, 2008.

The Union Cabinet on 27th March 2008 gave its approval for creation of a Farmers’ Debt Relief Fund with an initial corpus of Rs. 10,000 crore to be transferred from the Consolidated Fund of India to Public Accounts during the financial year 2007-08 and also gave its approval for augmentation of the Fund required for reimbursing the lending institutions the amount of debt waiver /relief granted by them totaling Rs. 60,314 crore.

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