Business Standard

  • FinMin mulled Rs 5,000-cr guarantee company before farm loan waiver

    Prior to announcing the Rs 60,000-crore farm loan waiver package, the finance ministry had toyed with the idea of setting up an Agriculture Credit Guarantee Corporation with a corpus of around Rs 5,000 crore to deal with bad loans. The entity would have insured lenders against borrower defaults with banks making less provisioning for such loans and continuing to offer farm loans. However, the plan was dropped after the amount of the waiver and relief package rose to a massive Rs 60,000 crore. "We then thought of giving direct subsidies to farmers as there will be no leakage in this scheme and the benefits will go directly to farmers,' said a government official. Cooperative banks account for Rs 37,000 crore or about 61 per cent of the Rs 60,000-crore package announced in the Budget. Regional rural banks and scheduled commercial banks account for Rs 12,000 crore and Rs 11,000 crore, respectively. The details of the farm package are likely to be finalised by March 25. As the government will implement this package over a period of three financial years, it may make a provision of up to Rs 25,000 crore in 2008-09. Part of the financial assistance due for restructuring of cooperatives according to the recommendations of the Vaidyanathan Committee is also likely to be part of the package, officials say. Cooperatives and banks may also have to share a little burden in case of default loan accounts, which have been written off for prudential accounting norms.

  • PM: Waiver picks up unpaid distress bill

    Prime Minister Manmohan Singh today claimed the political credit for making a speech that not only led to a Bharatiya Janata Party (BJP) walkout from the Lok Sabha but earned him applause from the Left parties. Days after the government declared it hadn't given up on the Indo-US civil nuclear agreement despite the Left's staunch opposition to it, and Congress President Sonia Gandhi announcing at a party rally in Tripura that the government was not in power because of any favours shown by the Left, the political message of the PM's speech today was: opposition to the BJP was not the Left parties' prerogative. In his speech in reply to the President's address to the joint sitting of Parliament, Singh charged the Opposition with ruining the lives of farmers and giving in to terrorist pressures when it was in power until 2004. Rejecting Opposition charge that the farm loan waiver was announced with an eye on elections, Singh said it was a historic initiative to meet the "unpaid distress bill' left behind by the erstwhile NDA government. "Doubts have been raised about the resources required for this write-off,' he said, referring to questions raised by Leader of Opposition L K Advani and other members asking the government how it could provide the whopping Rs 60,000 crore towards waiver of bank loans to small and marginal farmers. "Let me remind the Leader of the Opposition that what we have done is nothing more than picking up the unpaid distress bill which the NDA government left behind,' Singh said. If bankruptcy is permissible form of business outcome in industry, what is irrational about this waiver, he asked. "It will allow a fresh flow of institutional credit to farmers. It will clean up banks' balance sheets. It will stimulate economic activity in rural areas,' he said. Singh assured the House that the debt relief will be a simple exercise which will be completed by June-end. "It will not be a long drawn affair,' he said. Singh named Opposition leader L K Advani in his speech, leading to a walkout by the Bharatiya Janata Party (BJP) and its allies.

  • Jute industry seeks ban on imports from Bangladesh

    The jute industry has urged the ministry of textiles (MoT) to impose a ban on the imports of A.Twill and B.Twill jute bags from Bangladesh as part of its qualitative restriction. It has also requested the ministry for quantitative restrictions, whereby imports from Bangladesh will be limited giving a breather to the domestic jute industry. The country imported around 55,000 tonnes of jute products from Bangladesh, Nepal, China and Pakistan during 2006-07 jute season. The government recently made jute and jute goods imports duty free. According to the industry, qualitative and quantitative restrictions are required to be maintained as rules on these line have already been laid down in the Jute Mandatory Packaging Act (JPMA). In a letter to A K Singh, secretary, MoT, the jute industry has pointed out the events leading to the adverse effect faced by it because of the withdrawal of import duty on the crop and items. Indian Jute Mills Association ( IJMA) chairman, Sanjay Kajaria said, quantitative and qualitative restrictions need to be imposed to plug loopholes on imported jute bags by certain vested interested persons. Moreover, the restrictions would also ensure the stoppage of import of cheap and non-standard quality of jute bags which are not in conformity with Indian and international standards. The industry feels, unrestricted import of the raw crop and jute goods would be disastrous and therefore should be stopped immediately.

  • Gujarat aims at 15% industrial growth for 5 yrs

    'Brand Gujarat' is on the roll and the state government is aiming to reach out globally this time.

  • Uttarakhand agri set for major boost

    In its new agri-policy, which would be released shortly, the Uttarakhand government is planning to give interest-free loans for setting up self-employment agriculture industry (SAI) units under the sp

  • The economics of agriculture

    When will the political class realise that govt freebies offer no lasting solution?

  • Trend-setting Budget

    The government has made significant allocations to important developmental and social agenda, and yet provided enough stimuli for continued growth.

  • Navi Mumbai SEZ in troubled waters

    The Mukesh Ambani-controlled Navi Mumbai SEZ Pvt Ltd has been charged with indulging in illegal land-filling activity by the tehsildar of the Panvel taluka.

  • Paulson pressed on ADB funding rules

    Criticism of the ADB adds to recent concerns voiced by the US.

  • Agriculture land falls marginally

    The government today said the country's agriculture land has marginally fallen in 2005-06, mainly due to diversion of farm land for non-agricultural purposes.

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