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Authorisation has been given the authorisation for providing more relief to the farmers under the debt relief scheme, under the condition that government will not bear losses of the lenders.
Under this scheme, which is known as “One Time Settlement, the farmers will be given a debt relief which will be about 25% of the loans they have availed. But the condition is that 75% of the loan must be repaid by them to the banks. This is a scheme which will be applicable for all those loans which have been overdue by December 31, 2007 and which the farmers have not paid till February 29, 2008.
The government also has allowed the banks to collect amounts which are lesser than 75% of the loans from these farmers only if they do not require any help from the government. This information was given by the Reserve Bank. The spokesperson also mentioned that the government will pay only 25% of the loan amount of these farmers.
The OTS scheme has also undergone some variations. The farmers had been told to repay the amount in three instalments, the first one which had been due on 30.09.2008. The date of this initial instalment had been changed to 31.03.2009. But the other dates were not changed. (Second on 31.03.2009 and the last is due on 30.06.2009).
But now the government has mentioned that if a farmer pays off 75% of his loan in a single shot, he can avail OTS. This scheme of debt waiver had been a part of the plans when P. Chidambaram was the finance minister.
