Andhra Pradesh Chief Minister Chandrababu Naidu’s flagship scheme, Loan Waiver is more than a burden to the state. The government had announced waiver up to 1.5 Lakhs per family and also deposited the first instalment of that. The government is struggling to release the second instalment due to the financial crunch.
The burden is about 12500 Crore and 10% interest on that. The government has proposed one time settlement of 8000 Crore to banks and is requesting the waiver of remaining amount. The banks are considering this proposal since the government is promising a one time settlement. If they do, it will be a huge bonus to the government in this scheme.
On the other side, government has requested banks to give one time settlement offer to farmers who do not come under loan waiver scheme. Bankers have reacted favourably to this proposal which may waive of 30% of such loans. In such case, about 29 Lakh farmers may get a relief to the tune of 15000 Crores. If these proposals materialize, the government’s image in farmers will double!