New Delhi, May 23
The government today brought large farmers in the ambit of its Farm Loan Waiver Scheme, expanding the package by nearly 20 per cent to Rs 71,680 crore. Hiking provisions for debt waiver for farmers will enlarge the scope for relief for farmers by covering those with large acreage in dry land areas.

The scheme, which will benefit over four crore small and marginal and other large farmers will cost the exchequer Rs 71,680 crore as per un-audited estimates as against original estimate of Rs 60,000 crore. The decision to increase the debt waiver amount was taken at a meeting of the Cabinet presided over by Prime Minister Manmohan Singh, which approved guidelines for the implementation of the original scheme.

It was a demand voiced by Congress leader Rahul Gandhi, who had been suggesting enlargement of the scheme to include more farmers.

While participating in the Budget discussion, he had urged the government to widen the ambit of the scheme to cover farmers with larger acreage in the dry land areas.

Earlier, Congress president Sonia Gandhi had also hinted at more concessions for farmers’, post Union Budget for 2008-09. The latest development can also be attributed to the fact that despite announcement of the loan waiver scheme, farmers’ suicides continued to be an issue in the Vidharbha region.

The debt waiver and relief scheme will be implemented by the end of next month, finance minister P. Chidambaram said, adding that instructions would be issued to all bank branches to prepare a list of beneficiary farmers for display. The cash outgo from the Central Government to lending institutions has been estimated by RBI and Nabard at around Rs 60,416 crore for small and marginal farmers at about Rs 7,960 crore. The estimate of the additional cost of more liberal package to “other farmers” in identified 237 districts will be Rs 3,304 crore.

Under the modified scheme, all farmers, including big ones, will get a debt relief of 25 per cent of the outstanding amount or Rs 20,000, whichever is higher, in 237 identified districts. In Haryana, the identified districts are Bhiwani, Fatehabad, Hissar, Jhajhar, Mohindergarh, Rewari and Sirsa, in Himachal Bilaspur, Solan, Una, Kinnaur and Lahaul and Spiti and in Jammu and Kashmir Doda, Udhampur, Ramban, Kishtwar, Reasi, Kargil and Leh.

As per the guidelines, there will be complete loan waiver for small and marginal farmers, whether they are in identified districts or other areas. The scheme will cover direct agricultural loans extended to marginal and small farmers and “other farmers” through scheduled commercial banks and the local area banks.

Under the guidelines, marginal farmer means a farmer cultivating (as owner or tenant or share cropper) agricultural land up to one hectare (2.5 acre). Small farmer means a farmer cultivating agricultural land of more than one hectare and up to two hectares. “Other farmer” means a farmer cultivating agricultural land of more than two hectares.

In the case of a small or marginal farmer, the entire eligible amount shall be waived. In the case of other farmers, there will be a one-time settlement (OTS) scheme, under which, the farmer will be given a rebate of 25 per cent of the eligible amount subject to the condition that the farmer pays the balance of 75 per cent of the eligible amount.