The estimated farm loan waiver is about Rs 60314 crore, inclusive of total waiver amounting to Rs 50524 crore to small and marginal farmers and Rs 9790 crore as OTS to other farmers. Of the total, 55% will be for borrowings through cooperatives, 35% for borrowers from scheduled commercial banks (SCB) and 10% for borrowers from Regional Rural Banks (RRB).
The government will provide funds to the lending institutions over a period of 36 months from July 2008 to June 2011. Between July 2008 and June 2009, the government will provide Rs 25000 crore. The balance Rs 35000 crore will be provided in the next three budgets at Rs 15000 crore in Budget 2009-10, Rs 12000 crore in Budget 2010-11 and Rs 8000 crore in Budget 2011-02.
The Government will disburse Rs 25000 crore to lending institutions in July-August 2008 and another Rs 15000 crore in June-July 2009. In the process, about Rs 40000 crore, representing two third of the relief package will be released by August 2009. But the payment package would frontloaded in favour of cooperative institutions and RRBs that are typically more liquidity constrained than scheduled commercial banks. The amount will be funded by government from Tax revenues, non tax revenues, non debt capital receipts and additional borrowing, in the same order. Banks may actually stand to gain, atleast on books, to the extent of NPAs provided, as these can now be written back, as it will be paid by the government.
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The Bombay Stock Exchange was down over 770 points or 4.7 per cent to 15,350. major selling was seen in the frontline stocks. One can spot a gravestone doji in the previous candle which is a very bearish signal in 13rd March 2008 Chart. Nifty was down 249 points. The markets Nifty slipped below 4600 mark during the day and Sensex breached 15,400 mark. Broader markets have also collapsed with CNX Midcap down over 5% and BSE smallcap index was down 5%. Markets breadth is negative with advance:decline at 1:16.
Reasons behind Stock Market Fall
- Two-year yields slipped below 1.50 percent, 10-year yields fell to a seven-week low and the three-month bill yield held at 1.4 percent after Carlyle Capital Corp. said talks with lenders failed over $16.6 billion of defaulted debt through 12th March 2008.
- Oil prices hit a record 111.00 dollars per barrel 13th March 2008, Saudi Foreign Minister Prince Saud al-Faisal said speculators were largely responsible for the price peaks.
- The Euro (EUR) traded at a record high of 1.5559 versus the dollar.
- The US currency was last quoted at 100.14 yen after reaching 100.03, the lowest since Nov. 10, 1995.
- Industrial growth slipped to 5.3 per cent in the month of January, compared to 11.6 per cent in the same month last year as growth in all major sectors comprising manufacturing, electricity and mining declined.
- China's industrial output expanded by 15.4 percent in the first two months of 2008, It compares with a growth rate of 18.5 percent in the first two months of 2007.
- The Indian currency opened weak at 40.44 on 13th March 2008 compared to a gain of 12 paise at 40.33/34 on 12th March 2008.
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