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Capt Amarinder seeks one-time settlement for Rs. 6,000 crore farm loans

Statesman News Service | New Delhi/Chandigarh |

Punjab Chief Minister Captain Amarinder Singh on Thursday sought Central government's intervention for  one-time settlement of the Rs. 6,000 crore loans taken by the state’s farmers from the national and private banks.

Such a settlement will benefit 4.5 lakh of the state’s beleaguered farmers, the CM told Union finance minister Arun Jaitely at a meeting in New Delhi.

Captain Amarinder sought the minister’s intervention to convert the Rs 6000 Crore loan into term loan by giving requisite directions to the Reserve Bank of India (RBI).

Of the total debt of small and marginal farmers waived by the state, Rs 3600 crore relates to loan from cooperatives, with the remaining Rs 6000 crore coming from banks.

These banks, said the CM, were giving unethical loans to the farmers, pushing them into a vicious cycle of debt.

Captain Amarinder also discussed with the finance minister the issue of settlement of Rs 31000 Crore cash credit limit (CCL) related debt to ease the cash-crunched state’s financial burden.

The CM requested Jaitley to set up a committee on the issue, which Captain Amarinder had earlier taken up with Prime Minister Narendra Modi. He had pointed out that the Rs 18500 Crore interest on the Rs 12,500 Crore CCL legacy gap was exorbitant as it would mean that the state will end up paying Rs 270 Crore every month for next 20 years at the cost of welfare schemes of the state.

The CM also raised the issue of losses incurred by the state on procurement. He pointed out that of the Rs. 40,000 Crore procurement undertaken every year the state was suffering a loss of Rs 5,500 Crore, including about Rs. 3,500 crore on payment of instalments and interest on outstanding CCL debt.

Captain Amarinder also requested the finance minister to reconsider the state’s proposal for pre-payment of the high interest bearing National Small Savings Fund (NSSF) loan of Rs. 22,110 Crore and market loans of Rs. 33,938 Crore to swap these with low interest bearing loans.

Such a swap, he said, would help save interest burden of over Rs 3363 crore for the cash-crunched state.

The CM also urged the finance minister to waive off Goods and Services Tax (GST) on langar (community kithen) and prasad (religious offering) given out at gurdwaras, temples, churches and mosques.Capt Amarinder seeks one-time settlement for Rs. 6,000 crore farm loans