Debt waiver scheme: Govt to provide Rs 10,000 crore

NEW DELHI, Aug 12 (PTI): The Government is likely to release Rs 10,000 crore to banks and financial institutions as part of compensation for writing off loans under the farm-debt waiver scheme.

“The Finance Ministry is considering to release Rs 10,000 crore to lending institutions in a month or so,” official sources said. This would be over and above Rs 5,000 crore which was given earlier this fiscal to the banks and financial institutions towards the debt waiver scheme.

The government had announced that it would pay Rs 15,000 crore to the lenders during the current fiscal. The debt waiver scheme, announced by the government in 2008-09 Budget, was implemented by June 30, 2008, entailed a burden of Rs 71,000 crore on banks and financial institutions which the government promised to reimburse in stages. The government gave a total of Rs 25,000 crore to lending institutions as compensation towards the Agricultural Debt Waiver and Debt Relief Scheme.

Under the debt waiver and relief package, for small and marginal farmers (with holdings up to 2 hectare) there was a complete waiver of all loans due on December 31, 2007, and which remained unpaid until February 29, 2008. For other farmers, there was a one-time settlement scheme, under which a rebate of 25 per cent was given against the payment of the balance 75 per cent.

LIC to pump in Rs 40,000 crore

Kolkata, June 23 (PTI): Life Insurance Corporation of India today said it expects to pump in around Rs 40,000 crore in equities in 2009-10.

“LAST YEAR, we infused Rs 40,000 crore in equities. We expect to do the same this year,” LIC Chairman T S Vijayan told reporters here.

As per exposure norms, LIC was also investing in government papers and corporate debt. During the current financial year, LIC is eyeing a premium income growth of 20 per cent, Vijayan said, adding that premium collection had shown a good growth in the first three months of 2009-10.

LIC had suffered a setback in terms of premium income in last fiscal, he said, adding that LIC collected a premium income of Rs 1,55,000 crore, which included first premium income of Rs 52,000 crore.

Vijayan said that LIC would evenly sell both linked and non-linked products.

Asked if LIC needed to shore up its capital base as the paid-up capital was only Rs 5 crore, Vijayan said that there was no need for that.

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