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| Money
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| FM considers relief package ....... |
| The government is worried about mounting debt among the country's farmers and their ability to pay
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| INDIA
, 14-February-2008
9:18:29 AM |
| The government is worried about mounting debt among the country's farmers and their ability to pay. So this budget could see a huge write-off of farm loans.
Finance Ministry sources have told NDTV that the debt relief package could range between a massive 60,000 to 100,000cr rupees. These estimates are based on farm loans disbursed up to December end. And it is unlikely that there will be any cap on the size of the loan. If only marginal and small farmers are considered, the loan waiver would cost about 60,000 crore.
Such a massive loan waiver will be coming in the backdrop of a sharp dip in the growth forecast for agriculture and this could seriously jeopardise the nine per cent growth story of India.
Finance Minister P Chidambaram has said that the government's top priority is agriculture.
Although the details of the debt relief package are still being worked out, Finance Ministry officials have said that the Centre and states might share the cost of the package.
In addition, there could also be a farmer cess, which could be levied on direct as well as indirect taxes, just the way the Finance Minister raised the education cess by one per cent in the last budget.
While no one knows it better than the Finance Minister, the largest farm relief package is surely on its way and taxpayers will just have to wait and watch as to how the government funds it.
FM considering cess proposal
The government's proposal to waive off farmer loans to the tune of 65,000 crore rupees could cost the middle-class dear. NDTV has learnt that the Agriculture Ministry wants a one per cent cess on all direct and indirect taxes in the forthcoming budget.
There is a three-year fund mobilisation plan to write off farmer debts. NDTV has also learnt that Chidambaram has told the agriculture minister that he needs funds to finance the pay commission recommendations.
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