Finance Bill passed; Pranab extends relief package

Finance minister Pranab Mukherjee today announced some fresh concessions to industry, including service tax relief on construction, air travel and new hospitals as also debt relief package for coffee growers, even as the Lok Sabha passed the Finance Bill.

Mukherjee, however, said he would like to go in for necessary fiscal correction as the economy can bear with government borrowing only to an extent

"The economy can take fiscal deficit only to an extent," he said, adding, "We may provide much more to agriculture next year."

Under the fresh reliably package for coffee growers, 50 per cent of the total liability on pre-2002 loans will be waived subject to a maximum benefit of Rs5 lakh per farmer. An additional 25 per cent will be waived by banks and balance will be rescheduled. The Package also envisages 20 per cent waiver of liability under crop loans with 10 per cent each being borne by the government and banks respectively, subject to a maximum benefit of Rs1 lakh.

For Post-2002 term loans, 10 per cent of the total liability will be waived subject to a maximum benefit of Rs1 lakh. The package will also provide relief to medium and large farmers who will be permitted to reschedule the loans. The total financial implication for the government is Rs241.33 crore while benefit to coffee growers will be around Rs362.82 crore.

The Coffee growers in the country have been facing financial problems ever since the coffee prices fell to very low levels during 2000-2004. Relief packages in the form of special coffee term loan 2002 and special coffee relief package 2005 were sanctioned to revive coffee sector, besides other initiatives like PM's relief package for debt stressed farmers and debt waiver and debt relief scheme 2008. However, a large number of affected growers did not get the required relief.