Odisha Chief Minister Naveen Patnaik today wrote to Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley seeking Centre's intervention and "timely" financial assistance to tackle the severe drought in the state.
"I would like to request the Central government's intervention and timely financial assistance for combating the drought situation prevalent in my state," Patnaik wrote in his letter to PM Modi, a day after he addressed a farmers' rally in Bargarh district about the drought situation in Odisha.
Stating that a large part of Odisha was facing severe drought due to erratic and scanty rainfall during the kharif season, he said the drought condition damaged standing crops.
"My government has already initiated a number of pro-active measures to combat the drought situation," Patnaik said.
As against the decision of the Centre to provide crop loans to the farming community at 7 per cent rate of interest, the state government has been providing interest subvention to commercial and cooperative banks to bring down interest rate to 5 per cent, he said.
In case of prompt payment the effective rate of interest has been 2 per cent per annum after adjustment of the interest, incentive given by the Centre, Patnaik said.
"Keeping in view the prevalent drought situation in the state, my government has decided to further reduce the rate of interest on crop loans from the existing 5 per cent to 4 per cent through interest subvention by the state government for small, marginal and medium farmers," Patnaik said.
He said this will ultimately reduce the effective rate of interest on crop loans from the existing 2 per cent to 1 per cent in case of prompt paying farmers.
Earlier today, in a letter to Jaitley, the CM also
requested him to consider reduction of the interest rate and extend the interest intentive of 3 per cent admissible on crop loans to medium term (conversion) loans taking into account the widespread damage caused to the standing crops due to the drought situation prevalent in Odisha.
Stating that the Centre provides interest incentive at 3 per cent to the prompt paying farmers in respect to crop loans, Patnaik said the same facility is not available in case of conversion of such crop loans on account of drought.
"As a result, the interest rate on the converted loans remained at a high level. This will have additional financial burden on the drought-hit farmers," Patnaik mentioned.
"As crop loans are converted into Medium Term Loans, interest rate should remain at same level instead of charging higher rate of interest," Patnaik said. Similarly, incentive made available to prompt paying farmers of crop loans should also be extended to Medium Term (conversion) loans to provide relief to the affected farming community, he added.
Patnaik informed the Centre that the state government in a bid to give relief to the affected farmers has already decided to convert the crop loans advanced during the Kharif season, 2015, as Medium Term (conversion) Loan. This was part of the state government's drought package, he said.
As per the state government's decision, in case of crop damage between 33 per cent to 50 per cent, the crop loan will be converted to Medium Term (conversion) Loan payble within a period of two years with a moratorium of one year. Similarly, where the crop damage is 50 per cent or more, the conversion facility of the crop loan can be allowed for a maximum of 5 years with a moratorium of one year.
The state government, meanwhile, estimated that crop loss to the tune of 33 per cent to 66 per cent was witnessed over 4.69 lakh hectare of land while 63,020 hectare land sustained crop damage to the extend of 66 per cent or more.
Patnaik also telephoned Union Consumer Affairs, Food and PDS Minister Ram Vilas Paswan and urged him to ensure space in FCI godowns as paddy procurement precess has already started in the state.
