Government should take load of bank loan repayments

Apex industry body Assocham seeks government taking bank loan repayments of rural borrowers in drought hit areas
Government should take load of bank loan repayments

As part of an immediate relief kit to the farmers and rural population suffering an oppressive drought, the government should take the load of their bank loan repayments upon itself, besides reaching food grains to the affected areas at highly subsidized rates, Assocham President Sunil Kanoria said today.

Expressing a grave concern over a widespread rural crisis, the Assocham President said, “No meaningful gains can be accrued from over seven per cent GDP growth, if a large part of our population is pushed to live on the margins of distress and poverty. We believe in a holistic economic development which alone can help the trade, business and the industry. No one sector is isolated from the other. So, if one sector suffers, others must chip in.”

He said that the Chamber is not making a demand outright on the banks to take the load of loan waiver or moratorium on agriculture loans since the banks themselves are going through an unprecedented challenging times in terms of the non-performing assets.

However, the government should commit the maximum resources to the rural sector, as the fiscal burden on it has been considerably reduced thanks to ultra low prices of crude oil for about 18 months now.

Kanoria said, as estimated by the Assocham, the economy has taken a jolt of Rs 6.50 lakh crore because of drought in 265 districts in 11 states affecting 33 crore people.

Though the credit growth to the agriculture has been the maximum among all the sectors, the base for the agriculture loans has been low. “We are not suggesting populist measures like loan waiver as election freebie, but in case of natural distress like the drought, the affected people have to be helped. So, in the given circumstances, there is absolutely no rationale that can point towards a bad economic in providing relief to the needy. In fact, helping the poor and feeding them in times of distress should make an excellent economic proposition. It is only then, that a broad based confidence can be brought back into the economy.”

The Assoccham President was hopeful that situation would surely improve with regular onset of the Monsoon. “Hopefully, some relief would be forthcoming from the Rain Gods in the next few weeks, helping the agriculture and the entire allied sectors like milk production, meat and live stock.”

He said while the overall economy has managed to withstand the pressure of two successive droughts, specific sectors have come under severe stress requiring effective intervention.

Assocham also called for long-term solutions and increased spending in building rural infrastructure like village and semi urban roads, water sheds, small irrigation projects.

“The Centre and the states should form joint teams for implementation of the relief measures to reach the same in days and not in weeks or months,” Kanoria added.

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