Parrikar pays back poll support with loan settlement to ‘mining affected’

TEAM HERALD

PANJIM: Chief Minister Manohar Parrikar paid back the overwhelming support he received from the mining areas, which won him the South Goa Lok Sabha seat, with a generous subsidy to pay off their outstanding loans against trucks, barges and machinery.

After two long years of monetary struggle with the financial institutions, mining truck, barge and machinery owners got their first dose of relief, as the government’s One Time Settlement of loans policy was notified. While policy will be put into practice only when banks agree to a negotiated settlement less than the outstanding amount, the government intent to help has been stamped for the first time.

After missing a series of deadlines, the Government finally notified the much awaited “Debt Relief Scheme for mining affected borrowers of Financial Institution”.  The scheme that will remain in force for a period of six months from September 4. The One Time Settlement (OTS) scheme will cover over 9,000 trucks, barge and machinery owners in the State, wherein government proposes to provide interest-free subsidy to the tune of 35 per cent on their loan settlement amount. However, there is a ceiling on the actual quantum of this subsidy. It is Rs 15 lakh for truck owners, Rs 25 lakh for mining machinery owners and Rs 35 lakh for barge owners, against the total loan settlement amount, provided the loan was taken before September 30, 2012. This relief will only be for a period post mining suspension. The Government has made provision of Rs 400 crore for the scheme. 

Only borrowers with outstanding loans as on June 30, 2014 would be entitled for OTS scheme. The subsidy would be restricted to maximum three trucks, tippers, machinery and barges, with benefits being given to one person per family. 

The scheme has been drafted after financial institutions agreed to consider one time settlement of the loans and accordingly the institutions are working out OTS Scheme to be offered to the borrowers.

The scheme will not be applicable to borrowers engaged in mining or extraction or trading of minerals or lease holders. Also, it is not applicable to borrowers who have availed loans for personal, housing and other purposes. 

Government has appointed EDC as the nodal agency for implementation of the scheme. The subsidy would be released to the financial institutions by EDC that will be provided required funds by the government. “All such borrowings along with interest and other operational expenses (1% of subsidy for loan settlement disbursed) incurred by the Nodal Agency shall be reimbursed by the Government,” the scheme reads. 

EDC has been directed to maintain these funds in a separate bank account and release the payments to the banks and institutions directly after completion of the required procedure and sanction by the screening committee (5 member committee representing officer from EDC, Mines, finance and two charted accountants).