September 19, 2006	Tuesday	Sha'aban 25, 1427

ISLAMABAD, Sept 18: The government has decided to launch a countrywide Rs4.3 billion `revolving fund’ to finance the credit requirements of village organisations (VOs).

Officials told Dawn on Monday that the launching of the revolving fund would be part of the greater Rs7.8 billion crop maximisation project-II (enhancement on sustainable basis). In the first phase of the project, a credit component of Rs299.893 has been financed through Zari Taraqiati Bank Limited (ZTBL).

The project will be launched in 1,012 villages of 27 districts of all the four provinces, Azad Jummu and Kashmir and the Federally Administered Tribal Areas (Fata).

The ministry of food and agriculture and livestock (Minfal) proposed that it was a village-based community project for which a revolving fund was required for the sustainability of project activities by village organisations.

The fund will be available as a loan to the VOs, 50 per cent of which will be recovered from them, in five equal annual instalments starting from 6th year of loan disbursement in order to create a sense of ownership among the farmers and district/provincial governments.

The remai ning 50 per cent will remain with the VOs as government equity which will be used for further sustaining the project activities and adoption of production technologies to continue the increase in farm productivity.

The output value of the project, Minfal believed, would be far higher than the investment, therefore, the provision of revolving fund as one of the non-returnable grants needed to be offered.

However, the secretary planning and development division was of the view that the public sector development fund came from taxpayers’ money for which a deeper thought should be given before deciding to provide Rs4.3 billion as a non-returnable revolving fund.

However, Deputy Chairman Planning Commission Dr Akram Sheikh observed during a recent meeting that there was a need for social mobilisation especially in rural communities.

The concept for the proposed project implied that "we have more than 50,000 villages for which billions of rupees will be required as grant under the project".

He suggested that the secretary planning and development division should discuss the proposal with secretaries of Minfal and local government and rural development and give his recommendations regarding the proposed social mobilisation process and mechanism of revolving fund of Rs4.3 billion to village organisations.

Sources said it was decided to make available this Rs4.3 billion as part of the revolving fund by the deputy chairman Planning Commission.