SAFE HAVEN

New Delhi, March 27: The government today decided to set up a debt relief fund with an initial corpus of Rs 10,000 crore to write off loans of four crore farmers in the country.

The Rs 60,000-crore debt waiver scheme, announced in this year’s budget, will be implemented by June 30.

The relief fund will be augmented by another Rs 50,314 crore in the next four years to compensate banks and other lending institutions for losses resulting from the farm loan waiver scheme, an official spokesperson said after the cabinet meeting.

The government has earmarked Rs 10,000 crore for the fund in the supplementary demands for grants for 2007-08.

“Upon being granted the debt waiver or signing an agreement for debt relief under the one-time settlement, a farmer will be entitled to fresh agricultural loans from banks,” the spokesperson added.

All agricultural loans disbursed by scheduled commercial banks, regional rural banks and co-operative credit institutions till March 31, 2007 and overdue as on December 31, 2007 would be covered under the scheme, finance minister P. Chidambaram had said in his budget proposal.

Myanmar project

The government today approved a Rs 536-crore multi-modal transit transport project in Myanmar, which India will use to improve its access to the Northeast.

The cabinet also sanctioned funds under the “Aid to Myanmar” project for the upgradation of the Sittwe port and the Kaladan waterway. The money will be used for the construction of a road from Setpyitpyin (Kaletwa) to the India-Myanmar border.

To safeguard the domestic economy from any future balance of payment crisis, the government cleared a proposed currency swap agreement with Japan to exchange $3 billion.

Hero joint venture

The Rs 1,650-crore joint venture between the Hero group and Germany’s Daimler AG to manufacture commercial vehicles today got a go-ahead from the government.

The joint venture will design, manufacture and sell commercial vehicles of two tonnes and above for the domestic and overseas markets.

It will also source components from India for Daimler's global requirements, besides undertaking research and development activity for new products and variants.