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India waives loans to poor farmers in annual budget ahead of likely elections

India waives loans to poor farmers in annual budget ahead of likely elections

India's government announced plans to cancel poor farmers' debts and ease the tax burden on the average Indian, unveiling a budget on Friday that may be the current administration's last before national elections are held.
Polls must be held by May 2009 at the latest. But deep disagreements between the Congress party, which leads India's governing coalition, and its communist political allies have led many here to assume an election will take place sooner, possibly later this year.
The budget, for the fiscal year beginning April 1, seemed certain to fuel such speculation. It contained a heavy dose of populist measures, including debt relief for millions of farmers and increased spending on employment schemes, education, irrigation projects and insurance packages for poor.
Finance Minister P. Chidambaram said in his budget presentation to Parliament that the government would write off loans due on or before Dec. 31, 2007, to small farmers with land holdings of up to 2 hectares (5 acres).
The move is expected to benefit about four million farmers.
The loan write-off by state-owned lenders would cost an estimated 600 billion rupees (US$15 billion;


Updated : 2020-12-04 04:25 GMT+08:00