BENGALURU: Karnataka government unveiled a much-awaited farm loan waiver of up to Rs 34,000 Crore, giving relief to millions of farmers across the state, capping the waiver at Rs 2 Lakh per family, with Chief Minister HD Kumaraswamy presenting a Rs 2.18 Lakh Crore budget that made fuel more expensive. Kumaraswamy said, “I have decided to waive all defaulted crop loans of farmers up to 31 December 2017 in the first stage. (For) farmers who repaid the loan within time, as an encouragement to the non-defaulting farmers, I have decided to credit the repaid loan amount or Rs 25,000, whichever is less.”
The loan waiver package comes as an attempt to stick to the Rs 53,000 Crore write-off Kumaraswamy had announced in the election manifesto of his Janata Dal (Secular), which came to power in an alliance with the Congress party after the May 12 assembly elections. The CM also announced provisions to allow farmers to avail of new loans. Kumaraswamy said, “To facilitate farmers to avail new loans, action will be taken by the government to issue clearance certificate by waiving the arrears form the defaulting account. For this purpose, Rs 6500 Crore is earmarked in 2018-19 budget.”
The government is set to spend Rs 10,500 Crore towards the waiver package in the first year. Additionally, the government has also reiterated its commitment to allocate Rs 4000 Crore as part of the farm loan waiver announced by the previous Siddaramaiah-led government in July 2017. Siddaramaiah had announced waiver of up to Rs 50,000 on agricultural loans taken from cooperative banks, worth Rs 8165 Crore. Only Rs 4165 Crore was released as of last year, Kumaraswamy said.
As per guidelines, the state government is set to waive Rs 30,266 Crore of farm loans, benefiting 1.73 million farmers. Additionally, 2.76 million farmers who have made prompt payments on their loans are set to benefit from the incentive scheme of Rs 25,000 per farmer, amounting to Rs 6893 Crore.
