Farmers to get loans at lower rates

Continuing the spree of announcements aimed at elevating electoral prospects of the ruling Bharatiya Janata Party (BJP)-led National Democra...

Continuing the spree of announcements aimed at elevating electoral prospects of the ruling Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government, Finance Minister Jaswant Singh promised loans at lower rates to the farming community.

Sops to farmers came after Prime Minister Atal Bihari Vajpayee on Monday launched the Varistha Pension Bima Yojana to provide a steady stream of 9 per cent return to policy holders and promised to provide foodgrains to weaker sections of society at cheapest possible rates. His announcements were followed up by Singh, who, while addressing a joint meeting of the chief commissioners and director generals of the Central Board of Direct Taxes (CBDT) and Central Board of Customs and Excise (CBEC), assured the industry that search and seizure operations will not be undertaken by taxmen unless approved by the director general (Investigations).

Having comforted the weaker sections as well as the industry, Singh, alongwith Agriculture Minister Rajnath Singh, promised crop loans to farmers up to Rs 50,000 at 9 per cent interest rate. According to Agriculture Minister Rajnath Singh, farmers have been paying interest rates ranging from 14 to 18 per cent and the ‘‘historic decision will provide great relief to the farming community.’’ The Finance Minister said that Indian Banks Association (IBA) will work out a scheme for providing loans at competitive rates for purchase of tractors. Also, he added, a pilot project will be initiated in Tamil Nadu to provide loans to farmers through post offices.

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Jaswant Singh further said NABARD will start direct refinancing of the district central cooperative banks (DCCBs) on a voluntary basis. This, he added, will help in reducing transaction cost and benefit farmers.

When asked whether the carrot is being held out to farmers with an eye on elections, Jaswant Singh skirted the issue by stating, ‘‘With experience in farming I can tell you that carrots don’t roll out in this season!’’

It may be mentioned that elections are due in several important states such as Madhya Pradesh and Rajasthan later in the year. General elections will be held next year unless the government decides to prepone them.

The Finance Minister in his address to media remained upbeat about the economy and stressed, ‘‘India never had it so good in the past.’’ Refusing to hazard a guess on possible gross domestic product (GDP) growth rate for the current year, Jaswant Singh, ‘‘there are many agencies which forecast growth, wait for them’’. The minister pinned high hopes on monsoon and said that all the 36 meteorological divisions have received good rainfalls and reservoir levels are satisfactory, up 300 per cent as compared to the position last year. He added sowing too is satisfactory.

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Singh further said inflation rate is low, hovering between 4.5 to 5.5 per cent, foreign exchange reserves are high, above $83 billion, exports are growing and manufacturing sector is poised to do well. He added the growth index of six infrastructure sector industries is a pointer to the robust industrial growth.

As far as export growth rate is concerned, Jaswant Singh stressed that India did better than many Asian tigers such as Hong Kong, Singapore and Malaysia. He added Indian exports to China last year were up by 106 per cent, to US by 27 per cent, to Japan by 23 per cent and to Australia by 20 per cent. The global slowdown did not have any impact on India’s growth rate and this fact has been acknowledged even by the World Trade Organisation (WTO).