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EC asks government to defer implementation of education loan interest-waiver plan

15 Apr 2014 Evaluate

The Election Commission has asked the government to defer its Rs 2,600 crore scheme to provide a moratorium on interest payments on the education loans of 9 lakh students until the elections are completed.

The EC has noted that interest-waiver scheme can be implemented by the Finance Ministry after the election process and asked it not to execute any publicity of the scheme during the election period. Voting for General election is scheduled to take place during the period April 7 to May 12 and counting will be taken up on May 16.

In February 17 interim Budget, Finance Minister P Chidambaram announced the waiver of interest on education loans taken before March 2009 that were outstanding at the end of December 2013. As per the finance ministry, Rs 2,600 crore was transferred to the designated banker Canara Bank under Central Scheme for Interest Subsidy (CSIS), which was announced by the government during 2009-10 Budget. CSIS was introduced in respect of education loans disbursed after April 1, 2009, under which the government took over the burden of interest for the duration of the period of study and a little beyond. Till December 2013, public sector banks had 25,70,254 student loan accounts and the amount outstanding was Rs 57,700 crore.

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