As a fourth of the country reels under drought, the United Progressive Alliance government said on Tuesday it has no proposal to write off loans taken by farmers as it did in 2008 in its first term in office.
"There is no such proposal," Finance Minister Pranab Mukherjee said when asked if the government was considering a fresh debt waiver scheme to give relief to farmers.
The UPA government had last year announced a nearly Rs 71,000 crore (Rs 710 billion) farm loan waiver scheme to offer relief to farmers, especially the small and medium ones who were unable to access fresh loans due to non-payment of dues.
Noting that the full impact of failure of monsoon was yet to be assessed, the minister said the country would, however, be able to achieve six per cent plus economic growth during the current fiscal.
Agriculture accounts for a fifth of India's gross domestic product, but poor monsoon, besides eroding farm output, could also have a telling effect on consumer spending in rural areas.
Economic growth decelerated to 6.7 per cent in FY'09 from nine per cent in the previous fiscal, mainly due to the global financial meltdown. Drought is expected to compound the woes.
Mukherjee, who earlier inaugurated a conference of the heads of Regional Rural Banks, said that a committee would be formed to assess capital requirements of the RRBs.
Some RRBs, he added, would need capital infusion to achieve the capital adequacy requirement of 7 per cent.
