BJP takes govt to task over MFIs

Updated at:
BJP takes govt to task over MFIs
BJP takes govt to task over MFIs

Senior Bharatiya Janata Party leader Ch Vidyasagar Rao on Thursday accused the State government of being responsible for the mushrooming of micro-finance institutions, which forced the poor borrowers to end their lives by resorting to abusive and arm-twisting methods in loan recovery.

Talking to media persons at the party office, Mr Vidyasagar Rao strongly felt that effective implementation of Rural Debt Relief Act only could halt the atrocities of the private financial firms.


The former Union minister scoffed at the the Rural Development Minister Vatti Vasant Kumar’s statement that an ordinance could put down the violent activities of the MFIs and described this as ridiculous, and said that this would not serve any purpose.

Recalling that the Rural Debt Relief Act enacted in 1977 by the then Janata Party government at the Centre, Mr Vidyasagar Rao said that effective implementation of the Act will be a boon to artisans and poor people. 

However, this Act would not apply to those who have taken loans from the commercial banks, he added.

Pointing out to the Rural Development Minister’s statement that banks were encouraging the micro financial institutions by providing them loans, the BJP leader said the Minister’s remarks substantiated the fact that the Rosaiah government was incompetent and non-performing.

“In that case, what is the use of Vatti Vasant Kumar continuing in the Cabinet?”, he wondered.

Ridiculing the Chief Minister’s remarks in the meeting of officials on Wednesday that ‘Sircilla model’ would be followed to put a halt to the activities of MFIs, Rao said that nothing would happen as even today Sircilla remains a ‘place of hanging’ because many a victim of micro finance companies ended their lives.

He also charged the government with being responsible for the suicides of poor borrowers by promising to make women ‘lakhpatis’ through the Pavala Vaddi Scheme and leaving them in lurch later.

Pointing that former chief minister late YS Rajasekhara Reddy had announced Rs 350-crore in assistance to prevent suicides in Sircilla, the BJP leader stated that the present incumbent has not only reduced the same to Rs 150 crore but also failed to release the sum.

As a result, the poor women approached the MFIs and have become scapegoats, he added.

Under the circumstances, how could the government make Sircilla as a model to put a brake to the nefarious activities of the micro finance units, Mr Vidyasagar Rao questioned.