TS mobilises ₹2,000 crore RBI loanas development loan

The State government has mobilised ₹2,000 crore as State Development Loan (SDL) for the Rythu Bandhu scheme, the one of its kind scheme aimed at giving investment support to farmers at the rate of ₹4,000 an acre each for two seasons.

The government secured the amount during the yield-price based auctions conducted by the Reserve Bank of India on Tuesday. The loan comes with cut off yield (interest) of 8.15% with a tenure of 20 years.

This is the second tranche of the SDL availed by the State government during the current month. It had earlier raised ₹2,000 crore during the auction conducted on April 10 with cut off yield of 7.75 % and tenure of 25 years.

The government decided to raise the amounts to fulfil its commitment under the Rythu Bandhu scheme involving around ₹12,000 crore for the two seasons. The first phase of the scheme, commencing on May 10, is expected to entail an expenditure of over ₹6,000 crore in addition to the overheads which include the costs incurred for printing of the Pattadar passbooks-cum-title deeds with several security features.

Though the government had made budgetary provision for the Rythu Bandhu scheme, it had decided to leverage the option of market borrowings to ensure that there was no strain on the exchequer on account of the scheme. Accordingly, the government had mobilised ₹4,000 crore so far and is expected to go for another tranche of the SDL during the auction slated to be held in the second week of May.

The government, according to sources, received an assurance from the RBI that it would keep the required cash ready with banks and ensure that there was no inconvenience to farmers in availing the benefit in time. The RBI, on its part, clarified that there was sufficient cash available in the Apex Bank’s vaults and currency chests while printing of the notes had been ramped up in all the four note presses.

The shortage felt in some pockets was largely on account of logistical issues like replenishing of the ATMs frequently while recalibration of the ATMs was still underway. Steps were also being taken to ensure that currency was moved to areas which were witnessing unusually large cash withdrawals.