Bhopal: Rs 1200 cr question One-time settlement scheme gets stuck

Bhopal: The one-time settlement scheme announced for defaulter farmers in the state has got stuck. Around six lakh farmers are proposed to be covered under the scheme. They together owe Rs 6,000 crore, including penal interest of Rs 1,200 crore. To remove them from the defaulter category, the government would have to waive their penal interest, which amounts to Rs 1200 crore. Only then would they become eligible for getting further loans from co-operative banks. The government had proposed that the farmers may pay back the principal amount in installments and the interest would be taken care of by the government.

But the problem is who will bear the burden of Rs 1200 crore? The government had asked the Apex Bank to write off the amount.
However, the bank says that its profits margins are thin and it cannot afford to lose that much money. That means that the government will have to pay the amount to the bank.

That will require the consent of the finance department. After that, the proposal will be sent to the cabinet for its approval. This exercise may take a long time. The government is also dragging its feet on the scheme as it fears that if it waives the interest, the farmers may default further on their loan repayments.

The farmers who are repaying their loans regularly number around Rs 20 lakh and they together owe Rs 20,000 crore. If the government extends this special facility to the defaulters, it fears that these farmers may either turn defaulters or demand some sort of concession for themselves too.

The chief minister had announced the scheme to somehow mollify the agitating farmers but it had now become a pain in the government’s neck. It doesn’t know how to go about implemented it.

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