CAG to publish report on farm debt waiver plan

Government auditor CAG has said that it will come out with an audit report on a Rs 71,000-crore (Rs 710 billion) farm debt waiver scheme aimed at providing relief to around four crore farmers.

"(CAG is examining) how effectively that scheme (Agricultural Debt Waiver and Debt Relief Scheme) was implemented...that was implemented through banks," Comptroller and Auditor General Vinod Rai said in Shimla.

The report will not comment on the policy, but its implementation, he said, adding that it would be handed over to the government once it is compiled.

"We do not audit banks as it is done by the RBI and chartered accountants. But we decided to do this audit. So, now, we will look into the books of the banks also," he said.

In 2008, the government had announced the scheme for waiving loans of about 3 crore (30 million) farmers and giving partial relief to another one crore (10 million).

Under the scheme, marginal farmers cultivating crops in agricultural land of up to five acres got full debt waiver on their short-term crop loans. The scheme, which was for a limited period of 30 days, closed on June 30, 2008.

Other farmers, owning more than five acres of land, received one-time settlement relief through the payment of a portion of the debt.

The debt relief scheme was, however, extended by six months till June this year due to natural calamities.

"In view of the recent drought in some states and severe floods in other parts, I propose to extend by six months the period for repayment of the loan amount by farmers from December 31, 2009 to June 30, 2010," Finance Minister Pranab Mukherjee [ Images ] had said in his budget speech this year.

The scheme, intended to benefit around four crore farmers (40 million), was implemented through banks and other financial institutions.

When asked to comment on the auditing of regulators such as TRAI, PFRDA and others, Rai said that efforts are on to bring a few of them under the CAG's purview.

At present, regulators like TRAI and the Petroleum and Natural Gas Regulatory Board are fully or partially out of the CAG's mandate through their respective Acts.

A new bill, which aims to bring certain regulators under the purview of the CAG, is being drafted. Rai expressed the hope that the bill would be tabled in Parliament this year.