UPA Government asks RBI to start ‘loan for food’ scheme
As spiraling food prices are burning pockets of Indians, particularly middle class unlike to poor class which has availability of cheap and free good food, the UPA Government has asked Reserve Bank of India (RBI) to work out on 'loan for food' scheme. The government said that it was unwilling to take any steps to contain food inflation as rising food prices are good for farmers. Therefore the government has decided to open a new window of loan so that Indian working class can buy food like onion, tomatos, etc. by borrowing money from banks.
"We asked RBI Governor Raghuram Rajan to work on such a formula," said India's Finance Minister P Chidambaram.
The RBI currently is working on funding for lending scheme under which it would ask banks to offer auto and housing loans at cheaper rates. On the same lines, the government has asked RBI to study the similar kind of model in food sector.
"We asked RBI to work on micro-financing model in the food sector. So if somebody wants to buy 2 kg tomatos, he can go to bank and demand loan by merely submitting his PAN card or income proof. PAN card or income proof is required for recognizing the borrower as a middle class. We have also asked RBI to keep interest rates modest at 12 odd percent per annum," said Chidambaram.
Chidambaram, however, said that the interest rates would be higher on premium products like onion so that the middle class would not waste the precious product. Recently, onion prices rose by 254% putting itself in the bracket of precious commodities like gold, silver and platinum.
Chidambaram said "We are fairly optimistic about loan for food scheme. Now even middle class people will be able to include onion in their daily meal. That is the UPA government's inclusive policy."
