Karnataka to waive ₹8,165-cr crop loans

Our Bureau Bengaluru | Updated on January 12, 2018 Published on June 21, 2017

Karnataka Chief Minister Siddaramaiah announcing a farm loan waiver atthe Vidhana Soudha, in Bengaluru on Wednesday. K MURALI KUMAR

22.27 lakh farmers to get relief of up to ₹50,000 each

Karnataka on Wednesday announced a crop loan waiver of ₹50,000 per farmer.

Chief Minister Siddaramaiah, who also holds the finance portfolio, made a statement while replying to the demand for grants for various departments in the Legislative Assembly, that the State is going to incur ₹8,165 crore in additional expenditure through the loan waiver. The move is expected to help about 22.27 lakh farmers who had taken loans from various cooperative banks.

“Farmers are in distress,” Siddaramaiah said. “They have been demanding a loan waiver. We have to respond to farmers even though it will have an impact on the State’s finances.”

“So far the State government has been responsive to farmers’ plight through various measures taken in the agriculture sector. Now the government is waiving the crop loan or short-term loan of 22.27 lakh farmers from cooperative banks, outstanding till Tuesday (June 20), by ₹50,000 for each farmer,” he added.

Siddaramaiah urged the Centre to come to the rescue of farmers who have taken farm loans from nationalised and grameen banks.

The Centre had stonewalled the State government’s demand that farm loans taken in Karnataka from Central, rural and PSU banks — that stood at over ₹41,000 crore — be waived, said the CM. Successive drought periods during the last two years had deeply affected agriculture in the State, he pointed out.

Crop loans obtained from cooperative banks amount to just 20 per cent, while 80 per cent is from nationalised and grameen banks that come under the ambit of the Central government, he added.

The Karnataka government's decision comes in the wake of similar announcements made by the BJP-ruled Uttar Pradesh and Maharashtra and Congress-ruled Punjab governments.

Siddaramaiah’s sudden announcement caught Opposition parties BJP and JD(S) off the guard.

‘Too little, too late’

BJP Karnataka president BS Yedurappa said today he welcomes the government’s decision. The quantum of waiver should have been ₹1 lakh per head and the decision should have been taken earlier, as it would have helped farmers for the coming sowing season, he added.

Talking about his government’s finances, Siddaramaiah said it had not pushed the State into a debt trap but the government’s borrowings were well within the limits of fiscal discipline, at 18.93 per cent of the SGDP.

The BJP had alleged that the government was borrowing too much from the open market and the overall outstanding amounted to ₹2.42 lakh crore.

Published on June 21, 2017
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